Probe & Estate Planning

Probate Overview

Nothing is harder than losing a loved one.  At Spalding | Law llc, we can make a difficult process easier, both before and after the death of a loved one.  We understand Indiana probate and estate laws.  If you wish to prepare a will, trust, or other estate-planning document, or if you need an attorney to help probate the estate of a loved one, contact us to learn more about how we can help.  For a free consultation with an attorney at Spalding | Law llc, call us at (812) 339-4433 or contact us online.

Probate & Non-probate Assets

Probate is the court-supervised process following the death of a person (“decedent”) that generally includes proving the authenticity of the decedent’s will; appointing someone to handle the decedent’s ongoing affairs; identifying and inventorying the decedent’s property; paying debts and taxes; identifying heirs; and distributing the remaining assets of the decedent pursuant to a will or, if there is no will, intestate statutes.

“Probate” assets are those assets owned only by the decedent that do not have a named beneficiary or surviving joint owner.  Probate assets can be subject to court administration and, in many instances, can only be transferred out of the decedent’s estate through the probate process.

Unlike probate assets, “non-probate” assets have a named beneficiary or a surviving joint owner and become the property of the beneficiary or surviving joint owner immediately upon the death of the decedent.  Non-probate assets can be quickly transferred outside of the probate process.  Examples of non-probate assets include life insurance policies, tax-deferred retirement plans (e.g., IRA, 401(k), etc.), and property owned in a joint tenancy or trust.

At Spalding | Law llc, we help our clients realize the many goals of their estate plans.  It is imperative that this be done before the death of an individual.  To avoid the probate process and/or maximize tax benefits, many assets can be re-titled so that they will be considered non-probate assets.  This can be done in several ways, including:

Tenancy By The Entireties & Joint Tenancy With Rights Of Survivorship.  By titling an asset as a “tenancy by the entirety” (in the case of husband and wife) or as a joint tenancy with rights of survivorship, an individual can ensure that the asset will pass directly to the surviving joint owner without the need for probate.  This is commonly done with real estate, banking accounts, and vehicles.

Residuary Interest & Life Estate Interest.  An individual can transfer a residual interest in real estate while keeping a life estate.  Upon the death of the owner, the life estate terminates and the real estate passes to the residuary holder without the need for probate.  As a life estate holder, the individual continues to “own” the real estate and can claim the standard tax emptions.  Moreover, the real estate cannot be sold without the consent of the life estate holder.

Payment On Death & Transfer On Death Accounts.  POD and TOD designations allow an individual to name beneficiaries to certain assets, including bank accounts, real estate, stocks and bonds, and even personal property.  During the owner’s lifetime, he or she retains complete ownership of the asset and can revoke or change the designation at any time.  Upon the death of the owner, the asset transfers to the beneficiary without the need for probate.

Revocable Living Trusts.  The probate process can sometimes be avoided by creating a revocable living trust, which is similar in form and substance to a will.  This allows the owner of the trust (oftentimes called the “settlor” or “testator”) to transfer title of property into a trust.  The owner usually retains control of the trust and can revoke or change the trust.  When the owner dies, the trustee continues to manage the trust and in most cases distributes the trust assets pursuant to the terms of the trust and outside of the probate process.

Probate Procedure

Probate and estate administration is often viewed as a time-consuming and costly process; however, with the passage of new Indiana laws, that is no longer accurate.  At Spalding | Law llc, we help our clients navigate through the probate process with flexible and cost-effective strategies.

An estate that requires probate administration can be “supervised” or “unsupervised.”  Unsupervised estates are much simpler to administer.  With the exception of opening and closing the estate, the personal representative can administer the estate with little to no intervention from the court.  This not only reduces administration costs, but also provides more confidentiality since the decedent’s assets are not a part of the court’s record.  To administer an estate unsupervised, all heirs must provide their consent at the outset of the estate.

In a supervised estate, the personal representative must petition and obtain court approval prior to performing any action on behalf of the estate.  This includes selling the decedent’s assets, making partial or full distributions, and paying the decedent’s debts.  Once the personal representative has administered the estate, he or she must file a detailed closing statement and final accounting with the court.

The time period for probating an estate can vary depending on how the estate is administered (e.g., supervised or unsupervised) and the type of assets in the estate.  In general, the following must be accomplished to probate an estate:

Admitting The Will. To begin the probate process, a formal or informal petition with an attached original will (if there is one) must be filed with the probate court.

Appointment Of The Personal Representative. The probate court will appoint the named personal representative in the will or will appoint a person with priority according to Indiana statute.  Often referred to as an Executor for a male or Executrix for a female, the personal representative is responsible for handling the affairs of the estate and is usually assisted by an attorney.

Inventory & Appraisal Of Estate Assets.  Within 60 days after the appointment of the personal representative, an inventory of the estate assets must be prepared and presented to the heirs of the estate if requested.

Identification & Payment Of Estate Debts.  The personal representative is required to provide notice of the estate to the decedent’s creditors.  This is done by mail (if the creditors are known) and by publication in a newspaper.  Creditors have 3 months from the date of first publication to file its claims against the estate.  The personal representative will pay these debts, in order of priority, out of the estate assets unless he or she disputes the validity of the creditor’s claim or if there are insufficient assets in the estate to pay all claims.

Final Distribution & Closing.  Once the waiting period has expired and the estate debts – including Indiana inheritance, federal estate, and estate income taxes – have been paid, the personal representative will prepare and file a final accounting with the probate court.  Once the final accounting is approved, the remainder of the estate will be distributed to the beneficiaries named in the will.  If there is no will, the estate will be distributed according to the intestate succession statute.  The estate can then be closed.

Exceptions to Probate

In some circumstances, a decedent’s probate assets can be transferred out of the estate without formal probate administration.  This can be done when the decedent’s probate estate less liens/encumbrances, cost of administration, and reasonable funeral expenses does not exceed $50,000.00.  In such cases, a “small estate” affidavit can be used in lieu of initiating formal probate administration.

Will Contests

A legal challenge – called a will contest – can be filed in probate court by anyone with an interest in the decedent’s will or who believes that the will is for some reason invalid.  A will contest must be initiated within 3 months from the date the will was admitted to probate.  Numerous statutory grounds exist for contesting a will, including mental incapacity, undue influence, improper execution, and fraud/forgery.

If a will is successfully contested, the probate court can disallow only that part of the will that was challenged, admit an earlier and valid will (if one exists) in its place, or determine that the decedent died intestate and distribute the estate assets pursuant to state intestate succession laws.

Legal Fees

At Spalding | Law llc, we are committee to providing our estate planning and probate clients with quality legal representation at an affordable cost.  Our fees in such cases are reasonable and consistent with the fee schedule published by the Monroe County Circuit Court.

If you wish to prepare a will, trust, or other estate-planning document, or if you need an attorney to help probate the estate of a loved one, please contact us to learn more about how we can help.  For a free consultation with an attorney at Spalding | Law llc, call us at (812) 339-4433 or contact us online.