The Probate Process in the State of Indiana

stick_figure_deceased_800_clrThe Probate Process

The Probate process in the State of Indiana and all other states is the lawful inventory, collection and distribution of the assets of a decedent, that is, a person who has died. It is a legal process. This means that the personal property, such as cash, jewels, cars, stocks, bonds, etc., and the real property (real estate), will be inventoried, valued, and listed with the Court along with a Petition to Probate the Estate of [Name of Person who died]. Non-probate property (such as property placed into a Living Trust or that was in a Pay on Death account) is not listed.

In the State of Indiana, opening an estate begins with the filing a Petition for Probate. Usually, the Last Will & Testament is attached to the Petition.  The Petition will ask the Court to appoint a Personal Representative (sometimes known as an Executor or Executrix) and is usually a relative. The Petition will tell the Court some important things, such as the date of death of the decedent and the names and addresses of the heirs.
If the estate has a value of less than $50,000.00 after certain deductibles (such as the cost of the funeral) and other expenses, then an Affidavit can be submitted instead of opening an estate. It is often called a “Small Estate Affidavit.”  If the primary asset is real estate, an affidavit can be used to transfer the property for sale purposes.

Supervised and Unsupervised Estates

There are two kinds of estates in terms of probate. There is the “supervised” estate and there is the “unsupervised” estate. In the supervised estate, the Personal Representative (PR) literally has to get approval of the Court for virtually everything. If she needs to liquidate (sell) property, then she must get a Court Order. If the PR wants to abandon property because it has no value, or the value of maintaining the property would be too costly, then he has to file a motion with the Court and get permission.

With an unsupervised estate, the Court does not get involved in the process except in seeing the petition and appointing the Personal Representative, and in the closing of the estate. Otherwise, the Personal Representative does whatever he or she needs to do in order to effectively administer the estate. After the assets are distributed, the PR files a Closing Statement with the Court.

Duties of the Personal Representative

There are a lot of duties for the PR. He will need to make a complete inventory of all the assets. That means, he’s got to make a list of what property was owned by the decedent and then has to determine the “date of death” value of that property. The PR has a duty to fairly administer the estate, which means she will have to make sure that there is no reckless spending or investing. If there is a business involved, then she may have to hire someone to continue running the business. In short, the PR becomes the overseer, the CEO of the business in a sense. She may not run the business, but she has a duty to make sure someone competent is hired to run the business. She has a fiduciary duty to take care of the assets of the estate.

Legal Fees and Costs of Probate

Find an attorney who has experience in estate work. Usually, a lawyer who does Wills and Trusts has the knowledge and experience in handling an estate. Always ask. You also should ask about fees. Typically, fees will range from 4% to 10% of the value of an estate, depending on the size of the estate (the higher the value of the estate, the lower the fees). Sometimes, lawyers will charge by the hour. Fees may range from $200-$350.00 an hour, or higher, depending on the complexity of the estate. Basic costs are the filing fee, publishing fees and administrative fees. All of these fees typically run around $300.00, but can be more. There are a lot of copying to be done in an estate case. Sometimes, there are appraisal costs, and there can be some travel costs.

Avoid Estate Litigation if Possible

stick_figure_chasing_money_150_clr_5122Realize this: Like divorce cases, in estate litigation typically, the oneS who will make out the most are the lawyers. Always strive for a Family Settlement Agreement. Sometimes, it is impossible, but if you have lawyers on each side who are experienced, ethical and professional, then it is usually achievable. Litigation is expensive. The lawyer hired for the Estate is going to be paid for his or her work from the Estate. That means you, as an heir, will get less. So, unless there is one person on the other side who remains unmovable and his or her refusal to negotiate is absolutely unreasonable, work to get everyone on board for  a Family Settlement Agreement. Otherwise, you’re all going to fight and fights costs money. Sometimes, there is no way to avoid a legal fight. But, that should be a last resort. If you have the right lawyer, he will know that and will work to avoid litigation, but will be prepared in the event there is no other way.



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Michael Jackson Estate|Poor Estate Planning Freezes Assets

michaeljacksonMichael Jackson died a rich man. But, three years later, his children have yet to see a dime of their father’s estate. Instead, litigation has swirled around the estate, costing millions in legal and other fees.

More than three years after the death of Michael Jackson, the trust fund for his children, Prince, Paris, and Blanket, ages 15, 14, and 10, has to yet be dispersed. His estate is $600 million and Estate Street Partners (ESP) has this advice in Feb 2013 for others to avoid a Jackson-like disaster. Rocco Beatrice, Managing Director of ESP, founders of the UltraTrust irrevocable trust, explains that “because of poor estate planning Michael’s family will have to still wait years until his probate, estate taxes, creditors’ claims, and other legal battles are finalized.” Read story here.

Michael Jackson 1 billion dollar estate debate
Merely executing a will is not always sufficient to preclude issues in an estate. One should look at all options, including a trust, or perhaps an LLP. One must look at what the expectations are of the person who wishes to pass his or her estate, as well as the circumstances. Is there a business? Will the business pass to all the heirs? Who will run the business? Are there going to be issues about who runs the business? What about compensation for the one(s) who runs the business? Is there a second marriage? Will the other children feel cheated? Is there going to be in inequitable distribution of the estate? If so, will this cause issues within the family? Is there going to be an “undue influence” allegation made? Is there a basis for such a charge? All of these are legitimate questions that ought to be answered. These, and much more complex questions and issues exist in the Michael Jackson estate.

The lawyer who drafts an estate plan usually meets with clients with considerably less assets than those existing in the Jackson estate, but the issues in the Jackson estate are common to many family situations. If these kinds of questions and more are not anticipated, then there is a likelihood that at the death of the testator or testatrix, a will contest will ensue. Sadly, in such instances, the ones who benefit most are usually the lawyers.

Bottom line: Plan for every contingency you can think of, and try to anticipate the worst case scenario. Be up front and honest with your attorney.

 


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