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Formal Estates
Estate Administration
Testate vs. Intestate

 Dying without a Last Will and Testament
 Dying with a will that does not meet the requirements by Indiana law.
 A will can be determined partially intestate if the bequest or distribution is ambiguous. IC 29-1-2-4
 Dying with a will not probated within 3 years of the decedent’s death.
 Know the Intestate Succession.
 If you can’t find the known intestate heirs you will need to do a diligence search and file a petition to determine heirship (with publication)

Intestate Succession I.C. 29-1-2-1
 If you die without A Will, your heirs are:
 If Married
 ½ to Spouse ½ to children or issue of deceased child to share that deceased child’s share
 2nd or childless spouse (when children) ½ to spouse of the personal property ¼ of the value of real estate. The rest to the children or issue of deceased children.
 Spouse ¾ if no children and Parents split ¼
 With no surviving children, or issue or parents then all to the spouse

Intestate Succession
 Unmarried
 With one or more children or issue of a deceased child, estate is dividend equally among the children, or collective issue of a deceased child.
 If no children or issue, estate is divided between the brothers/sisters or their issue if deceased and the parents (but parent each receive at least 1/4 share.
 See Chart in Handout

 Decedent died with a valid Will.
 Verify that the Will meets the requirements of Indiana Law.
 Testator/Testatrix was of sound mind.
 Testator/Testatrix was over 18.
 Two Witnesses
 Make sure your Will is Self-Proved.
 If not self-proved – do Affidavit of Proof of Will.
 Must obtain from one of the witnesses.
 If Witness cannot be found, someone who can identify the decedent’s handwriting/signature
 Lastly, someone that can identify the witness’s signature.

Problems with Wills
 Decedent’s will was notarized not witnessed by two witnesses.
 Will was a will kit from the internet or store and will provided wishes not bequests or devises.
 Will was not signed, only acknowledge.

 Ind. Code 29-1-2-14
Adultery; forfeiture of rights to estate or trust
Sec. 14. If either a husband or wife shall have left the other and shall be living at the time of his or her death in adultery, he or she as the case may be shall take no part of the estate or trust of the deceased husband or wife.

 This does not mean an affair.

 Ind. Code 29-1-2-15
Abandonment; forfeiture of rights to estate or trust
Sec. 15. If a person shall abandon his or her spouse without just cause, he or she shall take no part of his or her estate or trust.

Probate vs. Non-Probate Assets

Probate Assets
 Real estate held only in decedent’s name
 Cars titled solely in decedent’s name
 Personal property which is not joint.
 Bank Accounts in decedent’s name alone.
 Stock, bonds and securities accounts held in decedent’s name only.
 Pensions, IRA’s or Life Insurance with no named designation or beneficiary, payable to estate.
Other Probate Assets
 Interest in partnerships or LLC.
 Time shares (if located in Indiana).
 Inheritances from an estate that vested while decedent was alive.
 Unclaimed Property
 Tax Refunds
 Magazine and Newspaper refunds.

Non-Probate Assets
 Houses held joint with spouse (tenants by the entireties) husband/wife
 Houses held joint with rights of Survivorship.
 Be sure to verify that the ownership is joint with rights of survivorship and not tenants-in-common which would entitle the estate to ½ and the joint holder ½.
 Any bank account, security account, stock that is held joint with rights of survivorship will pass to the surviving owner.
 Often a son or daughter gets their name on the account to help mom or dad with the bills – again verify the account by asking the bank for a copy of the account opening card.

Administering the Estate
 After you have verified all the assets and how they are held you must determine which type of estate administration is best.
 Small Estate Affidavit
 Summary Administration
 Supervised Administration
 Unsupervised Administration
 Petition for No Administration (Spread Will of Record)

Small Estate Administration
 Ind. Code 29-1-8-1
 Assets must be under $50,000
 More than 45 days since date of death
 That no application or petition for the appointment of a personal representative is pending or has been granted in any jurisdiction.
 The name and address of each other person that is entitled to a share of the property and the part of the property to which each person is entitled.
 That the claimant has notified each person identified in the affidavit of the claimant's intention to present an affidavit under this section.
 That the claimant is entitled to payment or delivery of the property on behalf of each person identified in the affidavit.
 However, Any person to whom payment, delivery, transfer or issuance is made is answerable and accountable therefor to any personal representative of the estate or to any other person having a superior right. See 29-1-8-2

Summary Administration
 Ind. Code 29-1-8-3 and 29-1-8-4
 (a) If it appears that the value of a decedent's gross probate estate, less liens and encumbrances, does not exceed the sum of: (1) fifty thousand dollars ($50,000) - previously less depending on the year of death;
(2) the costs and expenses of administration; and
(3) reasonable funeral expenses;
the personal representative or a person acting on behalf of the distributees, without giving notice to creditors, may immediately disburse and distribute the estate to the persons entitled to it and file a closing statement after cost of administration and reasonable funeral expenses
 If Real Estate: An affidavit may be recorded in the office of the recorder in the county in which the real property is located. The affidavit must contain the following:
(1) The legal description of the real property.
(2) The following statement: "It appears that the decedent's gross probate estate, less liens and encumbrances, does not exceed the sum of the following: fifty thousand dollars ($50,000), the costs and expenses of administration, and reasonable funeral expenses."
(3) The name of each person entitled to at least a part interest in the real property as a result of a decedent's death, the share to which each person is entitled, and whether the share is a divided or undivided interest.
(4) A statement which explains how each person's share has been determined.

Summary Administration (Cont.)
 Closing Statement (must attached Affidavit if vested real estate)

 29-1-8-4. [A]t any time after disbursement and distribution of the estate, a verified statement stating that:
(1) to the best knowledge of the personal representative or person acting on behalf of the distributees the value of the gross probate estate, less liens and encumbrances, did not exceed the sum of:
(A) the allowance, if any, provided by IC 29-1-4-1;
(B) the costs and expenses of administration; and
(C) reasonable funeral expenses;
(2) the personal representative or person acting on behalf of the distributees has fully administered the estate by disbursing and distributing it to the persons entitled to it; and
(3) the personal representative or person acting on behalf of the distributees has sent a copy of the closing statement to all distributees of the estate and to all creditors or other claimants of whom he is aware and has furnished a full account in writing of his administration to the distributees whose interests are affected.

 Note in 29-1-8-4 (b) If no actions, claims, objections, or proceedings involving the personal representative or person acting on behalf of the distributees are filed in the court within three (3) months after the closing statement is filed, the appointment of the personal representative or the duties of the person acting on behalf of the distributees terminate.

 Similar to under IC 29-1-7.5-4.

Supervised Administration

 Petition is filed with Court
 Probate of Will (if testate)
 Must file Inventory with Court
 Must petition the court for authority to sell assets.
 Must petition court for any distributions
 Final Report and detailed Accounting must be filed with the Court.
 Supplemental Report required.

Unsupervised Administration

 Petition is filed with the Court by interested party
 (creditors cannot open estate unsupervised.
 Inventory must be prepared, but only a Certification of its preparation is filed with the Court.
 Personal Representative may sell assets without court order.
 Accounting is prepared and sent to heirs or legatees, but is not filed with the court.
 Closing Statement is filed (closes estate after 3 months).
Petition for No Administration (Spread Will of Record)
 Petition is filed with the original Will
 Puts creditors on notice that no estate will be opened.
 Validates the Will, so three year limitation to probate Will is not a problem is assets are later discovered.
 Gives Executor right to act for small estates and summary administration.

Administer the Estate Assets
 Identify all assets of the estate and non-probate assets (for inheritance tax and federal estate tax purposes).
 Obtain appraisals when needed
 Collect the assets promptly
 If Real Estate
 Discuss whether to distribute or sell immediately.
 If rental property, have someone or a property management company lined up immediately to collect rents and maintain the property.
 If supervised estate, petition the court for authority to continue the business.
 Insist on receipts for cash rents.

Administer the Estate Assets (Cont.)
 Personal Property
 Get Inventory by appraiser or written list made (if property is minimal) promptly.
 If estate is small, family members may be forced to purchase the personal property.
 Use an auction company, discourage garage sales.
 Shop around. Compare commission and advertising costs and pick up charges.
 Private or Public Sale (If supervised you must petition the court for authority)
 Jewelry
 Get appraisal on fine jewelry
 Fair market value not replacement value.

Personal Property When Married
 Personal property owned as tenants in common; exceptions Ind. Code 32-17-11-29
 Bank Accounts (personal property) that is owned by two (2) or more persons is owned by them as tenants in common unless expressed otherwise in a written instrument.

 Exception: (c) Upon the death of either husband or wife:
(1) household goods acquired during marriage; and in possession of both husband and wife; and
(2) any promissory note, bond, certificate of title to a motor vehicle; or other written or printed instrument evidencing an interest in tangible or intangible personal property in the name of both husband and wife becomes the sole property of the surviving spouse unless a clear contrary intention is expressed in a written instrument.

Administer the Estate Assets (Cont.)
 To collect the bank accounts you must have the consent to transfer form (often checking accts. n/a)
 It depends on the bank, even if statute excepts checking accounts. The bank is required to report.
 Certified death certificate
 Letters of Administration/Testamentary
 Or Small Estate Affidavit if over 45 days and it meets the requirements.
 Often the bank wants the EIN number for the estate.
 Remember to change the address on these accounts even if closing so you will get the 1099 mailed to the correct address at the end of the year.

Administer the Estate Assets
 Get DOD value of stock (
 Use the mean value for the date of death value for your consent to transfer form and IH-6.
 This means the average of the high/low price for the day. Not the close price.
 If decedent died on a weekend, you must use the average of the mean on Friday/Monday.
 Be sure to include accrued dividends, if there are dividends earned but not yet paid.
 If there are stock splits after death, Your consent must show the total shares but at ½ of DOD basis to release all of the shares.

Administer the Estate Assets
 Stocks
 Determine whether you will be vesting the stock in kind or selling stock to pay expenses.
 Find original stock certificate or see if decedent has book shares.
 File Consent To Transfer form with the right number of shares with the mean value with County Assessor.
 Affidavit of Domicile
 Certified Death Certificate
 Letter of Instruction from PR
 Stock Power (guaranteed)
 W-9 (with Estates EIN)

Administer the Estate Assets (Cont.)
 If vehicles, get value and find buyer promptly.
 (Kelly Blue Book Private Party)
 Vehicles depreciate quickly
 Avoid cost of plates and insurance.
 Locate title or apply for duplicate title if you cannot find the original title.
 If you sell car, buyer will need a copy of the death certificate and Letters for the license branch.
 Do not let the vehicle be driven.
 This eliminates the risk to estate for accidents.

Administer the Estate Assets (Cont.)
 Trailers/Mobile Homes.
 Locate title
 Get value and see if encumbered by loan.
 Understand lot rents and utilities.
 Verify whether insured.
 Sell promptly.
 If you sell a trailer, the seller will need a copy of the death certificate and Letters Testamentary/Administration for the license branch.

Administer the Estate Assets

 Collect all refunds
 Cancel newpapers and magazines
 Cancel clubs like Hoosier Motor Club AAA
 They may give you a partial year’s refund
 If account was paying debts for medical or life insurance, collect premium refunds.
 Check for tax refunds.
 Cancel lock box rentals, ask for refund.
 If you sell house/car – ask for refunds on insurance.

Closing the Estates
 Supervised
 If there are sufficient funds, you may make a partial distribution to the beneficiaries or pay out any specific bequests by petitioning the Court.
 Wait to get tax clearance from IDR and IRS (if 706 was filed)
 Prepare a Final Report and Accounting (include copies of checks with the proposed distribution.
 Include the IDR’s white tax receipt as part of your exhibits on the Final Report.
 Upon receiving the Order on the Final Report, pays fees and make distribution, get receipts and file a Supplemental Report showing Compliance with the Court’s Order.
 In Order release the PR and the Bond company from further liability.
 Mail copy of the Order to the bond company.

Closing the Estate (Cont.)
 Unsupervised estate.
 Prepare Accounting, though not filed with the court, mail to all beneficiaries.
 Prepare and file Personal Representative’s Closing Statement, and send a copy to all beneficiaries.
 No Order is required, if no objections, estate is closed after 3 months.
 This may be different for Johnson County and surrounding counties, check with court.
Skin Designed By