Probate is the legal process when a person has assets that exceed Fifty Thousand Dollars ($50,000) owned solely by the decedent without a beneficiary on the assets. Probate is not only for a person who dies with a Last Will and Testament but also a person who dies without one (intestate).
Generally, you can open an unsupervised estate or supervised estate. If all of the beneficiaries consent to a person serving as the personal representative, then the person can serve without direct supervision and approval by the court. An out-of-state personal representative must obtain a bond from an insurance company to serve. If a dispute arises, many times the estate must be converted to a supervised estate to get the court's involvement and approval for actions taken by the personal representative. Likewise, if all of the beneficiaries do not consent, then the estate must be supervised.
After the estate is opened with the filing of the proper papers and the personal representative is sworn in by the court, notice is provided in the local newspaper to give creditors (medical bills/creditor cards, etc.) three (3) months from the first notice to file a claim for payment with the estate. Also, if the personal representative knows of any creditors, direct written notice to the creditor must be given. The personal representative must review the claims and pay any valid claims if the estate is solvent.
If any Indiana Inheritance Tax return is due, it must be filed within twelve (12) months of death to avoid a penalty, or nine (9) months to obtain a ten percent (10%) discount. The Indiana Inheritance Tax rate is based on the relationship of the beneficiary to the decedent and the fair market value of the assets at death. For instance, a spouse or charity pays no taxes. A child or grandchild pays tax only if their share exceeds One Hundred Thousand Dollars ($100,000); the exemption is much lower for siblings, nieces/nephews, and a friend.
After all of the above steps are taken, the personal representative will file closing papers with the probate court to close the estate. Unless a dispute or issue arises, an estate can be typically closed within one (1) year.
Every case is unique. If the probate assets are less than Fifty Thousand Dollars ($50,000) a formal probate estate is not necessary but still documents and taxes may still need to be prepared and filed.