Indiana

To the best of our knowledge, the information provided below is current and accurate. Always be sure to consult with a jurisdictional authority before using this information to educate or counsel your clients.

State Estate or Inheritance Taxes

Indiana has no state estate or inheritance tax.

Small Estate Probate

Every state offers a fast track or shortcut for the probate of "small estates." Some assert that probate court is the proper forum for passing a small estate to the heirs, the idea being that if an estate is not valued over a certain minimum threshold, it is too small for serious estate planning.

To be sure, when a state's small estate probate threshold is extremely low, using this shortcut to settle an estate that qualifies may be the obvious choice. However, the small estate probate threshold in some states is substantial, in which case serious issues should be considered before you allow a client to go to the default system of the state court. When small estate probate is appropriate and what the client desires, refer to the following information.

You can use the small estate probate process in Indiana if the value of property subject to probate does not exceed $50,000 plus the costs of administration and reasonable funeral expenses. The personal representative can distribute all the assets to the people who are entitled to inherit them. The personal representative does not have to notify creditors before distributing the assets.

After the assets have been given to the inheritors, the personal representative files a closing statement with the court and sends a copy to everyone who inherited and to all creditors of the estate. The personal representative must also give inheritors an accounting of how the assets were distributed. If real estate was transferred, an affidavit should be filed with the county recorder's office in the county where the real estate is situated and also filed with the closing statement.

Indiana also has a procedure that allows inheritors to skip probate altogether when the value of all the assets left behind is less than a certain amount. All an inheritor has to do is prepare an affidavit stating that he or she is entitled to a certain asset and present it along with a copy of the death certificate to the person or institution holding the asset for release. Again, If the affidavit procedure is used, there's no need to use the small estate probate process. An affidavit can't be used to transfer real estate.

The out-of-court affidavit procedure is available in Indiana if the value of the gross probate estate, less liens and encumbrances, does not exceed $50,000. There is a 45-day waiting period.