Will I have to pay Iowa's inheritance tax?

You cannot "gain full access to this money without being taxed."  Why on earth would you think you could avoid being taxed in this scenario?  All inheritance is taken subject to administration, which, by definition, includes dealing with and paying all taxes owed.  If the Estate or fund is consumed by taxes and other Estate expenses, then you get no inheritance.  All of the taxes and expenses of the Estate come first, you get whatever is left to the extent of your bequest. The Executor will give you the money, if it passes through the Estate.  If it is a non-probate asset, then it does not pass through the Estate, meaning, it passes according to the account agreement/contract.  In that instance, it is yours and title passes at the moment of death.  It would only be subject to taxes and other estate expenses, if the estate is insolvent.  THIS IS TEXAS LAW, NOT IOWA OR ILLINOIS LAW. I hope this answers your question(s). Sincerely, Kevin Spencer www.spencerlawpc.com