If your mother recently died, you are likely feeling overwhelmed with the emotional and practical aftermath of her passing. If you were named as the Executor of her Last Will and Testament, or you are the most likely person to handle the administration of her estate in the absence of a Will, you will undoubtedly want to avoid formal probate if possible. The only way to know with certainty that your mother’s estate can avoid formal probate is to consult with an experienced probate attorney. The Indianapolis probate attorneys at Frank & Kraft, however, offer an overview of alternatives to formal probate in Indiana.
Probate Basics for the Beginner
Your mother left behind an estate that consists of all assets she owned and/or had an ownership interest in at the time of her death. This includes things such as her home, vehicle, and bank accounts along with investment accounts and household furnishings. If your mother’s estate was relatively small, and does not include complex assets, her estate may qualify for a small estate alternative to formal probate. If so, that will significantly shorten the amount of time it takes to probate her estate as well as reduce the costs associated with probating her estate.
If, however, your mother’s estate requires formal probate, it is in your best interest to retain the services of a probate attorney to help you for several reasons. The probate process requires several steps, many of which involve potentially complex legal concepts. Unless you have a legal background, it will be easy to overlook an important step or commit errors during the probate process. Those errors could be costly, both in terms of time and money.
Probate vs Non-Probate Assets
Deciding whether or not an estate can avoid formal probate begins with evaluating the estate assets to determine if they are probate or non-probate assets. Only probate assets are required to go through any type of probate. Non-probate assets pass to the new owner outside of the probate process. Therefore, you need to categorize your mother’s estate assets and find out how big her actual probate estate is before deciding if formal probate is required. Common examples of non-probate assets include:
- Assets held in a trust
- Proceeds of a life insurance policy
- Certain types of jointly held property
- Assets held in an account designated as “Payable on Death (POD)” or “Transfer on Death (TOD)”
- Certain retirement or pension accounts
Can You Use a Small Estate Alternative?
Once you have separated the non-probate assets from the probate assets, you should consider whether the estate qualifies for an alternative to probate that is aimed at small estates. In Indiana, anyone in possession of estate assets may distribute those assets without going through the formal probate process if all the following conditions apply:
- The value of the probate estate does not exceed $50,000 plus funeral expenses and reasonable expenses related to the administration of the estate.
- At least 45 days have past since the death of the decedent (except when the asset is a vehicle or watercraft which may be transferred after five days).
- Formal probate has not been initiated and is not contemplated.
If your mother’s estate meets all of the guidelines mentioned above, you will be able to avoid formal probate and transfer her probate assets using the small estate method.
Contact Indianapolis Probate Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about probating an estate, contact the experienced Indianapolis probate attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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