CREATION AND VALIDITY OF TRUSTS

Iowa Code tit. XV, ch. 633A, subch. II, pt. 1

in effect

Iowa Code § 633A.2101 Methods of creating trusts.

633A.2101. Methods of creating trusts. A trust may be created by any of the following methods: 1. Transfer of property to another person as trustee during the settlor’s lifetime, or by will taking effect upon the settlor’s death. 2. Declaration by the owner of property that the owner holds property as trustee. 3. Exercise of a power of appointment in favor of another person as trustee. 4. A promise enforceable by the trustee to transfer property to the trustee. 99 Acts, ch 125, §8, 109C2001, §633.21012005 Acts, ch 38, §54CS2005, §633A.2101

Iowa Code § 633A.2102 Requirements for validity.

633A.2102. Requirements for validity. 1. A trust is created only if all of the following elements are satisfied: a. The settlor was competent and indicated an intention to create a trust. b. The same person is not the sole trustee and sole beneficiary. c. The trust has a definite beneficiary or a beneficiary who will be definitely ascertained within the period of the applicable rule against perpetuities, unless the trust is a charitable trust, an honorary trust, or a trust for pets. d. The trustee has duties to perform. 2. A power in a trustee to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails and the property passes to the person or persons who would have taken the property had the power not been conferred. 3. A trust is not merged or invalid because a person, including but not limited to the settlor of the trust, is or may become the sole trustee and the sole holder of the present beneficial interest in the trust, provided that one or more other persons hold a beneficial interest in the trust, whether such interest be vested or contingent, present or future, and whether created by express provision of the instrument or as a result of reversion to the settlor’s estate. 99 Acts, ch 125, §9, 109C2001, §633.21022002 Acts, ch 1107, §2; 2003 Acts, ch 95, §9; 2005 Acts, ch 38, §54CS2005, §633A.2102

Iowa Code § 633A.2103 Statute of frauds.

633A.2103. Statute of frauds. 1. A trust is enforceable when evidenced by either of the following: a. A written instrument signed by the trustee, or by the trustee’s agent if authorized in writing. b. A written instrument conveying the trust property signed by the settlor, or by the settlor’s agent if authorized in writing. 2. If an owner of property declares that property is held upon a trust, the written instrument evidencing the trust must be signed by the settlor according to one of the following: a. Before or at the time of the declaration. b. After the time of the declaration but before the settlor has transferred the property. 3. If an owner of property while living transfers property to another person to hold upon a trust, the written instrument evidencing the trust must be signed according to one of the following: a. By the settlor, concurrently with or before the transfer. b. By the trustee, concurrently with or before the transfer, or after the transfer but before the trustee has transferred the property to a third person. 4. Oral trusts that have not been reduced to writing as specified in this section are not enforceable. This section does not affect the power of a court to declare a resulting or constructive trust in the appropriate case or to order other relief where appropriate. 99 Acts, ch 125, §10, 109C2001, §633.21032003 Acts, ch 95, §10, 11; 2005 Acts, ch 38, §54CS2005, §633A.2103

Iowa Code § 633A.2104 Trust purposes.

633A.2104. Trust purposes. 1. A trust is created only if it has a private or charitable purpose that is not unlawful or against public policy. 2. A trust created for a private purpose must be administered for the benefit of its beneficiaries. 99 Acts, ch 125, §11, 109C2001, §633.21042005 Acts, ch 38, §54CS2005, §633A.2104

Iowa Code § 633A.2105 Honorary trusts — trusts for pets.

633A.2105. Honorary trusts — trusts for pets. 1. A trust for a lawful noncharitable purpose for which there is no definite or definitely ascertainable beneficiary is valid but may be performed by the trustee for only twenty-one years, whether or not the terms of the trust contemplate a longer duration. 2. A trust for the care of an animal living at the settlor’s death is valid. The trust terminates when no living animal is covered by its terms. 3. A portion of the property of a trust authorized by this section shall not be converted to any use other than its intended use unless the terms of the trust so provide or the court determines that the value of the trust property substantially exceeds the amount required. 4. The intended use of a trust authorized by this section may be enforced by a person designated for that purpose in the terms of the trust or, if none, by a person appointed by the court. 99 Acts, ch 125, §12, 109C2001, §633.21052005 Acts, ch 38, §54CS2005, §633A.2105

Iowa Code § 633A.2106 Resulting trusts.

633A.2106. Resulting trusts. 1. Where the owner of property gratuitously transfers the property and manifests in the trust instrument an intention that the transferee should hold the property in trust but the trust fails, the transferee holds the trust estate as a resulting trust for the transferor or the transferor’s estate, unless either of the following is true: a. The transferor manifested in the trust instrument an intention that no resulting trust should arise. b. The intended trust fails for illegality and the policy against unjust enrichment of the transferee is outweighed by the policy against giving relief to a person who has entered into an illegal transaction. 2. Where the owner of property gratuitously transfers the property subject to a trust which is properly declared and which has been fully performed without exhausting the trust estate, the trustee holds the surplus as a resulting trust for the transferor or the transferor’s estate, unless the transferor manifested in the trust instrument an intention that no resulting trust of the surplus should arise. 3. If the transferor’s estate is the recipient of property under this section and the administration of that estate has been closed and there is no question as to the proper recipients of the property, it is not necessary to reopen the estate administration for the purpose of distribution. 99 Acts, ch 125, §13, 109; 2000 Acts, ch 1150, §8C2001, §633.21062005 Acts, ch 38, §54CS2005, §633A.2106

Iowa Code § 633A.2107 Constructive trusts.

633A.2107. Constructive trusts. A constructive trust arises when a person holding title to property is subject to an equitable duty to convey the property to another, on the ground that the person holding title would be unjustly enriched if the person were permitted to retain the property. 99 Acts, ch 125, §14, 109C2001, §633.21072005 Acts, ch 38, §54CS2005, §633A.2107

Source: Iowa Legislature (legis.iowa.gov)URL: https://www.legis.iowa.gov/law/iowaCode/sections?codeChapter=633A&year=2026Fetched: 10/20/2026