The Probate Process
If you have actually ever had to deal with the processing of a will after a member of the family passes away, then chances are that you go to the very least somewhat accustomed to probate. As in various other states, probate in Indiana is a court-supervised procedure by which estates obtain worked out. The process is there to stop any kind of kind of scams and ensure that your estate ends up in the hands of right people. The people you wish to benefit from the distribution of your estate. As a result, possessions are essentially frozen upon passing to make sure that the court can evaluate the validity of the will, acknowledge the estate’s executor, and after that has occurred, move forward to resolve your events.
This process mandates that both financial institutions as well as beneficiaries be notified. Assets are catalogued as well as evaluated, financial debts are cleared up– consisting of taxes, and the court authorizes distribution of the properties according to the regulations in your will. As soon as every one of that is accomplished and also a final audit is given to the court, the judge formally closes the estate.
It is essential to identify that a will is inadequate to maintain your estate out of probate. That objective can only be completed by making certain that your possessions have a way of being instantly transferred to one more proprietor when you die, making use of points like living counts on or specific account transfer choices.
In the state of Indiana, creditor rights supersede the rights of beneficiaries. Because of this, any prior debts must all be paid prior to asset distribution to beneficiaries. Basically, the role of an executor is to perform the following tasks:
- Account for all estate assets and their worth
- Make it a point to ensure the estate has paid any outstanding debts
- Provide for the orderly distribution of assets to beneficiaries.
Those three things must all be done in that order, to protect not only the creditors but the beneficiaries as well. After all, no beneficiary wants to receive an inheritance only to find that a creditor is pursuing those assets because he didn’t get paid! To prevent that, the executor has a responsibility to make reasonable attempts to notify creditors so that they can pursue any legitimate claim.
Estate Planning Laws for Small Estates
In the state of Indiana, your estate can be settled using just an Affidavit whenever the total gross value of the estate is below $50,000. There is also a 45-day waiting period from the time the decedent passes away. In determining the value of the estate, certain assets are excluded. These include any assets with joint tenancy, accounts that are payable on death, property that transfers on death, and life insurance policies with named beneficiaries.
Indiana Estate Laws Passing on Wealth to Minor Children
Another question that is often raised focuses on the best way to pass wealth to minor children. Like many other jurisdictions, Indiana does not allow minors to inherit any property directly. As a result, if you want to leave property to your minor children, you need to do it in a way that involves an adult managing it until the child reaches the age of eighteen. Trusts can help to simplify this process, since there will be a Trustee to manage the child’s inheritance. There are other options as well, and you should discuss them with an estate planning attorney to determine which is right for you.
Estate Planning Laws Inheriting a Life Insurance Policy
In most instances, determining who gets the benefits from a decedent’s life insurance policy has nothing to do with things like trusts or wills. That’s because life insurance policies are designed so that the policyholder names beneficiaries. In Indiana, life insurance payouts go to named beneficiaries on the policy. There are exceptions, of course – such as might occur in instances where the policyholder named his estate as the beneficiary.
Estate Planning Laws Regarding Joint Tenancy Property
Under the rules for survivorship In Indiana, any property that is considered to be held in what is known as “joint tenancy” automatically goes to the surviving tenant. Joint tenancy is a type of joint ownership most commonly seen when property is owned by married couples. Joint tenancy is also used by parents and their children or sometimes in instances where there are partners who are not related.
Estate Planning Tax Concerns
Taxes owed by the estate have to be paid after the decedent’s passing away, of course. In fact, there are several tax returns that have to be submitted, including a state income tax return as well as any one of three federal returns. Possible funding gains tax obligation issues as well as direct exposure to federal inheritance tax responsibility will certainly additionally require to be attended to. Indiana has no estate tax.
Indiana Estate Planning Laws Regarding Dying Without a Will
If you stop working to provide a will, after that Indiana’s intestacy laws figure out where your properties go. Those regulations focus on successors starting with your closest family members such as a spouse as well as kids, and then expand to consist of everybody from moms and dads and grandparents to relatives, nephews, nieces, and so forth. It is necessary to recognize this so that you can take affirmative action to plan your estate in such a way that mirrors your dreams.
Q: What is Probate?
A: Probate is the court and process that looks after people who cannot make their own personal, health care and financial decisions. These people fall into three general categories which are the following:
- Minor Children (under age 18 in most states)
- Incapacitated Adults
- People who have died without a will or other form of legal arrangement
The individuals that make an estate plan to avoid probate court accomplish three very specific goals which are:
- Save money
- Avoid the legal wrangling of probate court
- Prevent personal affairs from entering into the public record
Q: What is a Will?
A: The will is a document that an individual creates so that they are able to ensure the orderly disposition of all of their assets after they have passed. In and of themselves, wills do not avoid the probate process as wills have no legal authority until the creator dies and the original will is then delivered to the Probate Court.
Q: What is the Benefit of a Will?
A: A will is the only way to appoint the new “parent” of a child that has been orphaned from the passing of both parents.
Q: What is a Living Will?
A: A living will is also commonly called an Advance Medical Directive. The purpose of a living will is so that an individual is able to state their wishes in the instance that an individual may potentially be placed on life support. An Advance Medical Directive is executed with a Durable Power of Attorney in the following situations:
- An individual may be placed on life support
- An individual is incapacitated and in a terminal condition
The Durable Power of Attorney allows an individual the legal ability to make decisions regarding health care in the event that an individual is incapacitated.
Q: What is a Revocable Living Trust?
A: A revocable living trust is a trust document created by an individual that can be changed over time. Revocable living trusts are used to avoid probate and to protect the privacy of the trust owner and beneficiaries of the trust as well as minimize estate taxes.
Q: What is an Irrevocable Living Trust?
A: An irrevocable living trust is a type of trust that may not be revoked or changed. Also, an irrevocable living trust is almost exclusively created for the benefit of producing a very specific set of tax or form of asset protection.