If you’ve had a loved pass away recently, you may be wondering whether or not you will have to go through probate. Probate can be a time-consuming and stressful process. But do all estates have to go through it? When is probate not necessary?
Does It Matter Whether There Is a Will or Not?
It doesn’t really matter whether the deceased left a will or not. Even if the deceased left a valid will, the estate may have to go to probate anyway. Reasons for this include the need to halt the proceedings so that:
- A judge can determine if the will is valid.
- The court can identify and appraise the properties.
- All creditors and taxes are paid.
- All relevant people receive proper notification.
However, in the state of Indiana, estates that fall under a certain value level are defined as “small estates” and may not require probate at all.
Assets That Don’t Need to Go Through Probate
Indiana assets that don’t have to go through probate include:
- Items owned in joint tenancy (by two or more people), including bank accounts and real estate
- Community property with right of survivorship
- Beneficiary designations on life insurance or retirement accounts
- Payable-on-death bank and brokerage accounts
- Transfer-on-death bank and brokerage accounts
- Property defined by and held in a living trust.
Often, small estates consist entirely of such assets, especially for individuals married for a long time and co-owned property with their spouses. Most goes to the spouse automatically.
Determining If You’re Dealing With a Small Estate
If you’re lucky, you can escape expensive probate proceedings altogether. First, though, you need to know what constitutes a “small estate” in Indiana.
Most states don’t count items in the previous list that don’t go through probate toward the official value of the estate. In some states, the small estate value is as little as $15,000. In others, it may be up to $100,000. Ultimately, the total value of the estate including those non-probated items may be substantial, but it can still count as a small estate.
These rules of ignoring living trusts, joint tenancy, beneficiary, and pay-on-death/transfer-on-death items apply to estates in Indiana, which has a $50,000 small estate limit.
Small Estate Alternatives for Probate in Indiana
Small estates qualify for simplified probate procedures, which makes clearing the estates much easier and less expensive than for larger ones. If the gross value is below $50,000, all you have to do as executor is to file some forms and wait a specified length of time. (This total value does not include liens or encumbrances). Once you’ve made a list of assets of items that will pass to heirs or beneficiaries according to the will or state intestacy laws, you can proceed.
You can do this in two ways:
Claim Property With Affidavits
All you need in this case is a simple affidavit from each of the people who have inherited property. An affidavit is a sworn statement signed by the inheritor and a notary. Basically, all it has to say is that the heir or beneficiary is the person meant to inherit the asset and that there will be no probate proceedings due to small estate rules. The inheritor then presents the affidavit to whoever has custody of the property in order to claim the asset.
The waiting period for Indiana is 45 days for most assets, but only five days for motor vehicles or watercraft (per IC 29-1-8-1).
Claim Property Using Summary Probate
Summary probate requires you to fill out a few fill-in-the-blanks forms you can get from the court. Just file them, show the court you’ve paid all relevant taxes and debts, and you can close the estate, immediately disbursing the assets to the heirs and beneficiaries (per IC 29-1-8-3).
When Is Probate Not Necessary? Ask an Indiana Probate Lawyer
Are you executing an estate in the Indianapolis or South Bend Areas, and wondering if you can avoid complex, costly probate? Call Barnes Caldwell Law today.