Asset Management Lawyer Protecting Against Probate Cases In Highland
For most of us, considering what happens after our death may be the furthest thing from our minds. As life happens and circumstances change, however, it can become a significant issue, and you must have the steps in place to support your loved ones and protect your assets after your death.
Many of us will address these issues by providing a detailed will, but even in this situation, you may be forced into battle with a well-known enemy for benefactors: probate.
What Is Probate?
Probate refers to the legal process, which automatically becomes needed if a person dies without leaving a will. As well, it may result in assets being frozen by the court while the will is checked for validity, and while an executor is determined. Supervised by the court, this is a chance for a named party – usually a spouse or relative – to be given the authority to gather the assets of the deceased, pay any outstanding debts and taxes, and transfer remaining assets to beneficiaries. The entire process can take anywhere from six months to a year or more, depending on the complexity of the situation and any unusual assets or arguments from beneficiaries or contesting from others.
Why Is Probate Not Required?
It is important to note that probate only applies to any assets owned in the sole name of the deceased. Any other assets will pass immediately to the new owners, and these may include:
- Property held in joint tenancy – this can refer to any asset such as a home or bank account and allows the asset to pass automatically to the survivor upon the death of one owner.
- Property held in tenancy by the entirety – this is similar to property held in joint tenancy but is exclusively for married couples. In Indiana, this refers to real estate only.
- Payable-on-death bank accounts – a type of bank account which passes to the beneficiary immediately, without the need for probate.
- Assets registered in transfer-on-death form – residents of Indiana can name transfer-on-death beneficiaries for securities and vehicles. Assets named on these forms do not have to go through probate but instead pass directly to the named beneficiary. A transfer-on-death deed can also be completed for any real estate to undergo the same process.
- Life insurance proceeds – as long as a life insurance policy specifies a beneficiary, there is no need for the proceeds to go through probate.
- Retirement accounts – as long as there is a named beneficiary, the funds held in retirement accounts do not go through probate.
- Living trust assets – any assets held in the name of the trustee of a living trust are exempt from probate
Are There Any Alternatives?
If estates are small, there are two options available:
- Simplified Probate Process: Suitable for estates with a value of under $50,000, plus funeral expenses, and any court fees, attorney fees and costs. This allows the representative to distribute all assets without delay before filing a closing statement with the court.
- Affidavit Process: If the total of the estate is worth no more than $50,000, anybody due to inherit personal property (excluding real estate), can prepare an affidavit explaining why they are entitled to certain assets. This, along with the death certificate, must be presented to the institution holding the property, and then the property may be released.
What Happens In Probate?
The first stage of any probate court proceeding requires the named executor to file the will and a “petition for probate” document with the court; this allows them to be officially named as the executor.
In some cases, the will is “self-proving” – the deceased plus witnesses have affirmed its validity. In this case, no further proof of efficacy is required unless there is a direct challenge. There is a slight exception if only the names of the witnesses are signed; they may be required to provide a sworn statement about the will signing.
Once the executor is established and validity confirmed, the executor is presented with “letters testamentary,” giving them authority over the assets of the estate. In the event that there is no will, a family member will instead be appointed as administrator of the estate and presented with “letters.”
It is the responsibility of this personal representative to gather and validate the assets, pay any outstanding taxes or debts, and distribute the assets to the beneficiaries. There are two types of administration: supervised and unsupervised,
- Unsupervised Administration: The more common option, this allows the personal representative more autonomy and the estate can largely be managed without reporting to, or seeking approval from, the court. It is allowed on the condition that the estate is solvent (more assets than debts), and this is agreed upon both in the will and with all inheritors. If there are no disputes over the validity of the will, or by anyone who stands to inherit, the personal representative will be able to sell, mortgage, or lease any real estate, and deal with assets and taxes without the approval of a court. This tends to be a cheaper option, as there are fewer papers to be filed in the court, and it tends to be a quicker process. The personal representative must prepare an inventory of all estate assets within 60 days, an estimate to the market value of each asset must be determined and made available to each inheritor upon request. A closing statement must also be provided within a year.
- Supervised Administration: This is more unusual but may be required if beneficiaries are fighting, or the heirs are unknown. It can also be used if there is no will, or the will is unclear, or in the event that the estate contains unusual assets. This option is sometimes used to actually expedite the process. In this case, the personal representative is required to file an inventory detailing assets to the court and receive court approval before selling any item. Once the estate is complete, a detailed accounting must be filed showing income and expenditures with necessary evidence.
Probate can be a complex challenge, and it is best to make sure you have qualified experience on your side. At Hilbrich Law Firm, we have helped numerous clients in Highland navigate the world of probate over the years, and can work with you to clear the path and help you take your next steps. Call us at (219) 924-2427 for guidance.