In the state of Indiana, the probate process is a vital component in the estate settlement process. When a person dies, the estate that is left behind needs to be closed in a rational and orderly manner. Probate in Indiana provides that mechanism with a court-supervised process that ties up all of the loose ends that remain in the aftermath of the decedent’s passing. The deceased’s assets are identified and appraised, his or her creditors have an opportunity to make their claims against the estate, and heirs are then provided with their rightful inheritances. After a final accounting from the personal representative overseeing the process, the court then closes the estate.
On the surface, that all sounds like a perfectly reasonable process that would be ideal for any estate. For many people, however, the probate process is not the ideal option for settling an estate. In fact, many of those people do all that they can to avoid having their estate subjected to probate. After taking the time to weigh the true cost of probate in Indiana, you might find yourself agreeing with that decision.
Of all the many complaints often heard from family members who experience the probate process, none are more distressing than reports of inheritances delayed. Loved ones who are named in a decedent’s will have to wait months before any assets are released, and this can sometimes impose various levels of financial hardship on them. This can be especially troubling when the deceased was a main contributor to the family’s household income. When assets are then tied up for months in probate, financial plans and schedules are often disrupted. That, of course, only adds to the family’s pain and grief.
Financial Costs of Probate in Indiana
Obviously, there are real financial costs involved as well – though these often pale in comparison to the time-costs involved in the process. Still, every dollar spent on probate is one less dollar available for the deceased’s heirs. Probate costs can be a tricky thing to estimate, but you should expect that the total amount of those costs will almost certainly add up to some noticeable portion of your estate’s total value.
Besides court fees, you can expect there to be attorney’s fees, some fee paid to the executor for his or her service, and the costs associated with any specialist services that may need to be employed for tasks like appraisal of assets or tax return preparation. All of these fees can add up to a substantial amount of money – all of which gets paid using the estate assets. And while the total cost of the combined attorney and executor fees cannot exceed ten percent of the value of the estate’s assets, that can still represent a very sizable amount of money.
What Do These Costs Mean to You?
Now, if we’re talking about the estate that you’ll leave behind when you pass away, some people might assume that there’s not much for you to be concerned about. After all, these are all problems that your heirs will have to deal with when you’re gone. The fact is, however, that this is precisely why so many people choose options that can help them to keep their estates out of probate when they die. They want their heirs to receive their inheritance as quickly as possible, rather than having everything tied up in court for six months to a year. They want their families to be taken care of, with a minimum of financial disruption.
Estate planning can help to achieve those goals through the use of strategies that are designed to keep assets out of probate. These strategies can help you to protect your assets, grow your estate over time, and ensure prompt and secure distribution to your heirs when you die.
Estate Planning Strategies that Work
Probate’s delays and costs can be avoided, but it requires solid planning to achieve that goal. To understand how these strategies work, you only need to consider why certain assets are subject to probate while others avoid the process altogether. The easiest way to understand all of this is to think about how your assets are owned. If an asset – like your bank account – is in your name and has no automatic way to be transferred to another party when you die, then that asset goes through probate. If, on the other hand, that same bank account also has a transfer-on-death provision attached to it, then it will automatically transfer to that party when you pass away.
That same principle holds true for all of the assets that you own. A home in just your name requires probate. A home owned in joint tenancy with another person would pass automatically to the surviving tenant when either of you dies. You see, probate is only needed when assets have no other means for transferring to their new intended owners, or in cases where there is no will and the state’s intestacy laws determine how they are distributed.
An experienced estate planning attorney can help you develop a comprehensive plan that incorporates a variety of different strategies to protect your assets and provide for their distribution when you die. That may include different types of account designations, the use of beneficiary designations for insurance policies, or more complex instruments like living trusts. Together, these tools can help to ensure that your heirs avoid the time delays and loss of inheritance value that is all too often associated with the probate process.
At Frank & Kraft, Attorneys at Law, our estate planning experts can help you to put all of this into perspective and decide which options are best for you. After you weigh the cost of probate, you may still find that the process will be the best option for settling your estate. If, on the other hand, you decide that more comprehensive estate planning is needed to help you avoid probate, we’ll work with you to create the perfect plan for your needs. To learn more about how we can assist you with all your estate planning and elder law needs, contact us online or call today at (317) 684-1100.
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.