To avoid a formal estate in the Court system, before July 1, 2022, the probate estate of the decedent must have been less than $50,000 less liens, encumbrances, and funeral expenses. Effective, July 1, 2022, for any Indiana resident who then passes away, this number has doubled to $100,000.
Consequently, any probate assets solely in the decedent’s name alone count toward this number. A bank account solely in decedent’s name without a beneficiary listed would be an example of a probate asset. Conversely, nonprobate assets pass automatically by law or by designation such as joint bank account owned with another, or a POD/TOD (Payable on Death/Transfer on Death) designation on an asset/account. Nonprobate assets do not count toward the $100,000 threshold. Special rules and transfer mechanisms exist for real estate owned solely by the decedent.
If the estate of the decedent does not exceed the $100,000 threshold, then, any interested party, can swear under oath, and execute a notarized Indiana Small Estate Affidavit (“Affidavit”) that can be presented to the party holding the assets, such as a bank. The bank, when presented with a properly executed Affidavit can release the assets to the party presenting the Affidavit and will be held harmless. This Affidavit is not filed with a Court.
This Affidavit, under oath must state at least the following:
- Gross probate estate (less liens and encumbrances/funeral expenses) does not exceed $100,000.
- 45 days have passed since decedent passed.
- No Petition to open an estate is pending or been granted by any Court.
- Names/addresses of all persons entitled to share of the decedent’s property.
- The persons in #4 above have been notified.
- The petitioner is entitled to payment or delivery of the assets on behalf of the persons listed in #4 above.
Motor vehicles and other titled assets at the Bureau of Motor Vehicles (BMV) can be transferred by the same Affidavit but can be transferred only 5 days after the passing of the decedent at the BMV.
So, what are some issues when the Affidavit shouldn’t be used? Many people are secretive with their affairs and heirs have no idea what a person’s assets/debts/tax situation truly is upon the decedent’s passing. Also, contentious family dynamics or disharmony could cause problems with using this expedited direct private form of estate administration.
Even if a Small Estate Affidavit may seem appropriate and prudent, it is advisable to seek legal counsel upon the passing of a loved one.