When is Probate Necessary in Indiana?

When is Probate Necessary in Indiana?Probate is a formal legal process that is overseen or supervised by the court that may be required after someone passes. The probate, court-supervised process typically gives a surviving spouse (or any other close family member) the authority to act as a personal representative who will administer the estate by –

  • Evaluating the decedent’s assets at the time of death.
  • Paying outstanding taxes or debts.
  • Distributing assets to those individuals who are intended beneficiaries.

Conducting an Indiana probate typically takes approximately one-half to one year, depending on the specific situation. Although, in rare circumstances, it may take longer than the average time should there be unique assets or debts or conflicting claims that need to be solved through the court system.

When is Probate Necessary?

In Indiana, only a deceased person’s assets (owned solely in his or her name) need to pass through probate. These assets are known as the “probate estate.”

When Necessary, How Does Probate Work in Indiana?

Probate proceedings are conducted in the Indiana county where the decedent lived or owned property (if they were not an Indiana resident).  The named person files the will and a Petition for Probate to be officially appointed executor.

No additional proof is necessary to document its validity if the will goes unchallenged and is self-proving. A self-proving is a will in which the witnesses (who watched the signing of the will) also sign an affidavit that indicates the will-maker was of sound mind when finalizing the will.

The probate court issues a document known as the “Letters Testamentary,” which is evidence of the executor’s authority to manage the estate’s assets.  If the decedent dies intestate (i.e., without a valid will), a family member can ask the court to appoint the estate’s administrator. In this case, the court will issue a document known as the “Letters of General Administration.”

The estate’s administrator or executor is also known as the estate’s “personal representative.” This usually requires the establishment of a checking/on-demand account to pay debts, estate expenses, and deposit assets that arrive after someone dies. However, a TIN (A Taxpayer Identification) number from the Internal Revenue Service must be obtained prior to account opening.

The Indiana Probate Court Process

The estate’s personal representative can request the estate to be administered with or without supervision by the court. Unsupervised probate is most common, with the personal rep having the authority to close out the estate without court approval.

If there is a need for probate court proceedings, a proceeding notice must be published in the area’s local newspaper as well as mailed to all known heirs and creditors listed in the probate petition. Creditors owed by the estate have three months to make a claim against the estate.

If the decedent owned real estate in another state but was an Indiana resident, the personal representative may need to conduct ancillary probate in that state.

Unsupervised Administration

Unsupervised administration is a good decision when the will is not being disputed.  Unsupervised administration requires less paperwork, which usually translates to lower legal fees, although the personal rep may be required to post a bond. But note, anyone who stands to inherit assets under state law (with or without a will) can proactively object to an unsupervised administration process.

An estate can be administered without court supervision if –

  • The estate has more assets than debts – known as solvency.
  • The will authorizes the use of unsupervised administration.
  • Everyone involved as a beneficiary is agreeable to the process.

The personal representative must inventory the decedent’s estate assets within 60 days, including a fair market estimate of each asset’s value. The inventory does not need to be court-filed, but anyone inheriting assets may receive a copy upon request. Within twelve months, the estate’s personal representative must file a closing statement with the court—or why it has not been completed.

Supervised Administration

Most supervised administration processes in probate have an excellent reason to want the court to weigh in on estate matters. This is because there is more legal paperwork and higher court/legal fees. Court oversight can be a good idea if –

  • There is fighting among beneficiaries.
  • There’s no will.
  • The heirs are unknown.
  • The will is unclear.
  • The estate has difficulty valuing assets that may include unique collections or unusual real estate.

In supervised administration, the personal representative of the estate must inventory the assets with the court and get court approval before selling any asset. When complete, the personal representative must file a detailed accounting of how the assets were distributed – including any supporting documents.

Assets Not Included in Probate

  • Property That is Held as Joint Tenancy

A home, bank accounts, or other owned property held as joint tenants do not pass-through probate. In this instance, one owner dies, the surviving owners obtain automatic ownership.

  • Property Held in Tenancy by the Entirety

This is a type of joint asset ownership.  Tenancy by the Entirety is ownership by married individuals) that includes a right of survivorship. If the decedent owned real property, along with their spouse, the ownership passes automatically to the surviving spouse as the sole owner.

  • Assets in a Payable-On-Death Bank Account

A payable-on-death (POD) account is a type of asset that passes to the POD beneficiary at the death of the joint owner – without the need for probate.

  • Assets Registered in Transfer-On-Death Form

Residents of Indiana can use a Transfer-on-Death (TOD) form to name beneficiaries on a Certificate of Title or other security instruments.  Assets that have been registered in this manner can pass without probate to the beneficiary designated by the decedent.

  • Real Estate Transferred by a Transfer-On-Death (TOD) Deed

In Indiana, real estate owners can utilize a Transfer-on-Death deed which allows the property to pass to the estate’s named beneficiaries without the need for probate.

  • Life Insurance Proceeds

Proceeds generated by life insurance or an annuity pass to beneficiaries without probate.

  • Retirement Accounts

Retirement assets do not go through probate if the decedent named a beneficiary on the account.

  • Living Trust Assets

Any assets that are held within a Living Trust’s trustee’s name do not pass-through probate.

Alternatives in Indiana for Probate for Small Estates

The state provides two alternatives to probate (IC 29-1-8-1).

  • A Simplified Probate Process

If the total estate has a value that does not exceed $50,000 (including reasonable expenses for funeral and the costs of administering the estate), the personal representative can distribute the assets to those entitled to the inheritance.

  • An Affidavit Process

If the total estate has a value that does not exceed $50,000, anyone who inherits personal property (NON-real estate) can prepare a simple affidavit explaining their entitlement to certain assets. The affidavit is presented to the institution holding the asset, who will be required to turn over the assets.

Is Probate Necessary for You? Speak with an Indiana Probate Lawyer Today.

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