One of the goals that can be addressed in estate planning is to help your heirs avoid the time and expense of probate, the legal process by which wills are proved and carried out. The costs of probate can be very high and usually come out of the value of the estate, which can greatly reduce the assets the heirs receive. Fortunately, there are several ways to keep assets out of probate, thus preserving their value for the next generation.
To start with, Indiana law allows small estates — those worth less than $50,000 plus funeral expenses and administration costs — to avoid probate entirely. Instead, the personal representative of these estates can distribute the assets directly to the people entitled to inherit them. Once the distribution is complete, the personal representative files a statement with the court to close the estate.
For people with estates worth more than $50,000, proper planning becomes critical. It is important to sit down with your lawyer and create a detailed estate plan that keeps as much of your estate out of probate as possible. Indiana offers various ways to accomplish this.
Living trusts are perhaps the most effective method. At the most basic level, creating a living trust allows you to manage designated assets for named beneficiaries during your lifetime and to name someone who will take over as trustee upon your death. The successor trustee can then distribute trust assets to your beneficiaries without the need for probate court proceedings. You can create a living trust for virtually any asset you own, whether it’s real estate, bank accounts, cars or other property of value.
Joint ownership is another way to avoid probate but only if it includes a right of survivorship. This right allows the property to automatically pass to your co-owner when you die. You can have joint ownership of vehicles, bank accounts, real estate and other items. If you are a married couple, you can hold real estate as “tenants by the entirety,” which includes the right of survivorship.
Additional methods to avoid probate in Indiana include:
While these methods all allow for transfers of specified assets without probate, it is still advisable to have a will to account for other property that may be part of your estate upon death.
Rubino, Ruman, Crosmer & Polen’s estate planning lawyers can help you build an estate plan designed to minimize probate and maximize what your heirs receive. Get started by calling our Dyer office at 219-227-4631 or contact us online to schedule a free initial consultation.