What Is Probate Court?

The probate court supervises the settlement of the estate of a deceased person (known as the decedent) when the estate is valued at $50,000 or more. One of the primary functions of probate is to ensure that the estate fully pays any outstanding debts or taxes before the remaining assets are distributed.

When an estate’s assets go through probate, the proceedings are public, so anyone can learn what the estate owned and who received the assets. Probate can also be time-consuming and costly, possibly reducing the value of the remaining assets before they’re distributed. That is why many people want to learn what strategies they can use to avoid going through probate.

What Are Strategies for Avoiding Probate in Indiana?

Numerous estate planning tools can help avoid sending all or most of an estate through probate, potentially speeding up the distribution process and making it less costly.

Some assets can be created to avoid probate, including the following:

Joint tenancy

When a couple jointly owns property and assets in their names, and one spouse dies, the asset or property automatically goes to the remaining spouse without going through probate.

Transfer-on-Death or Payable-on-Death Accounts

Transfer-on-death (TOD) or payable-on-death (POD) accounts are items such as bank accounts, retirement accounts, or life insurance proceeds where the owner of the account or insurance names a beneficiary to receive the funds when the owner dies. Because a beneficiary is designated, probate isn’t required to distribute the assets.

Trusts

One popular estate planning tool to avoid probate is to create a living trust. A trust takes ownership of the estate’s assets. Because the individual technically doesn’t own them, but the trust does, they can bypass probate and be distributed to the named beneficiaries reasonably quickly. As with any strategies listed here, avoiding probate allows the estate’s details and how it was distributed to remain private.

Trusts come in many different forms, each with its own pros and cons. Generally, trusts fall into one of two categories:

Revocable

A revocable living trust allows the estate’s owner to transfer their assets into the trust, but they can make changes, move assets in and out, or even cancel the trust as long as they’re alive and of sound mind. That’s a significant advantage, especially if there may be changes of beneficiaries (for example, if there’s a falling-out with a family member named an inheritor). Understanding that a revocable living trust may be subject to higher taxes is vital. It can also be pursued by creditors or winners of lawsuits against the estate.

Irrevocable

As the name implies, once an irrevocable living trust is finalized, the person who created the trust can no longer change or cancel the trust. This may sound riskier. But it has some advantages, too, including the fact that once it’s finalized, it may be subject to lower taxes, and creditors and lawsuits can’t come after the assets it owns.

One thing a trust cannot do is specify guardianship of minor children. If the estate owner’s death leaves orphaned minors behind, the only tool to avoid having probate decide who will be a guardian is to draw up a will that details that. It’s especially crucial if the parents want someone other than a close family member to be the guardian, as probate will likely look only at family members.

Every estate is unique; what works for one estate plan may not work for another. That’s why it’s essential to work with an experienced estate planning attorney to determine what might best serve your estate.

What if No Estate Plans Were in Place at the Time of the Decedent’s Death?

That’s known as dying intestate. In Indiana, the probate court will likely be required to handle the estate, manage its final bills, and determine the distribution of the remaining assets. There is a strict order of who will receive assets and how much they’ll receive. It’s important to understand that an intestate estate will be distributed only to family members. The estate will be assigned to the state if no surviving family members can be found. This rarely happens, but it’s a possibility. If you want someone or something outside your family (such as friends or nonprofits) to be beneficiaries, pursuing estate planning is highly recommended.

Without an estate plan, any assets are distributed in the following order: A surviving spouse receives all assets if there are no surviving children or decedent’s parent(s). The spouse would receive one-half of the assets if there is a surviving child, with the child receiving the other half. The spouse will receive three-quarters of the assets if there are no surviving children but one or both of the decedent’s parents are alive to receive the remaining quarter.

If none of those are present, more remote family members will be eligible to receive assets.

What Should I Do if I Need Help with Estate Planning?

Call Beeman Heifner Benge P.A. at 765-684-4355 to schedule your case evaluation. No matter the size of your estate, planning ahead can make things easier for your inheritors and will ensure that your assets are distributed as you want them to be–not left up to the probate court. Our team of experienced, knowledgeable estate planning attorneys can review the specifics of your estate to determine what could be the right approach to achieve the best possible outcomes.