Most of what adult children need to know about Iowa estate and incapacity planning is concentrated in a small number of documents. The recent phase-out of Iowa's inheritance tax has simplified the landscape for most families — though it should be verified for current-year deaths.

The four documents to have in place this year

These are universally applicable in Iowa regardless of wealth or family structure. Most cost between $250 and $1,000 through an Iowa-licensed attorney; the trust adds $1,000–$3,000.

1. Financial Power of Attorney (Iowa Code 633B)

Iowa adopted the Uniform Power of Attorney Act effective July 2014. An Iowa POA names a person (the agent) to handle your parent's financial affairs if they become unable to. Iowa law requires the principal's signature to be acknowledged before a notary public.1

For maximum bank acceptance, the document should be durable (surviving incapacity) and signed in front of a notary. Pre-2014 Iowa POAs may not have the same legal effect as those drafted under the UPOAA. Out-of-state POAs are generally honored by statute but Iowa banks may push back in practice.

2. Health Care Power of Attorney (Iowa Code 144B)

Iowa treats medical decision-making separately from financial decision-making. The Health Care POA names a person to make medical decisions when your parent cannot communicate their wishes. The document requires either two adult witnesses or notarization.2

3. Living Will Declaration (Iowa Code 144A)

Iowa's "Declaration Relating to Life-Sustaining Procedures" is the state's living-will document. It expresses your parent's wishes about end-of-life care — specifically, whether to withhold or withdraw life-sustaining procedures in defined terminal conditions. The document requires two adult witnesses.

4. Revocable Living Trust

A revocable trust is the workhorse of Iowa estate planning for families who want to avoid probate. Your parent transfers assets into the trust during life, retains full control as trustee, and names a successor trustee. Iowa adopted modern trust legislation under Iowa Code 633A (Iowa Trust Code).

Iowa inheritance tax: phased out (verify for 2026)

Iowa was historically one of about six states with an inheritance tax. Legislation enacted in 2021 phased the tax out over five years: rates were reduced annually and fully eliminated for deaths in 2025 and beyond.3 For 2026 deaths and forward, families should confirm with current Iowa Department of Revenue guidance, but the planning implication is that Iowa now joins the no-state-death-tax majority.

Through 2024 (and before the phaseout completed), the tax applied to non-lineal heirs — nieces, nephews, friends, most charitable bequests outside qualified categories. Lineal heirs (spouse, parents, children, grandchildren) were always exempt.

No state estate tax

Iowa has no state estate tax. Federal estate-tax exemption (~$13.99M per individual in 2025) applies; nearly all Iowa estates owe no estate tax at any level.

Probate in Iowa

Iowa probate is governed by Iowa Code 633 (Iowa Probate Code). Three main paths:

For estates exceeding $200,000 in non-trust assets that don't pass by survivorship, beneficiary designation, or TOD form, formal probate is generally required. Attorney's fees in Iowa probate are calculated based on reasonable compensation standards under Iowa Code 633.197 — the schedule allows a percentage of the gross estate.4

Iowa homestead and creditor protections

Iowa provides one of the more generous homestead protections in the country: under the Iowa Constitution and Iowa Code 561, the homestead is protected from forced sale by most judgment creditors. Iowa's homestead exemption is unlimited in value (within acreage limits — one-half acre urban, 40 acres rural), making it similar in strength to Florida's and Texas's protections.5

The protection applies during life. The exemption doesn't affect Medicaid eligibility (which uses the federal home-equity ceiling of ~$752,000) and doesn't protect against mortgages or property tax liens.

What to do this quarter