Probate

What is probate?
     When a person dies, probate is the legal process by which the Court will: (1) determine the validity of his or her will, if any; (2) determine the nature, extent and value of the deceased person’s assets; (3) establish and pay the valid debts and taxes of the deceased person; and (4) distribute the remaining assets to the persons named in the will, or, if the person had no valid will, to the persons determined by Indiana law after payment of applicable debts, taxes and expenses. Probate occurs whether a person dies with or without a will. Probate takes place in the probate court of the county where the deceased person resided. If the person also owned property in another state, additional probate proceedings may be necessary in that state.

Why is probate necessary?
      Probate is necessary to protect the assets of the deceased person for the heirs, creditors and other persons due money from the estate, and to ensure the collection of money due to the estate. Probate provides for payment of outstanding debts, taxes and expenses of administration and for distribution of the remainder of the estate to the heirs.

What does probate involve?
      Probating an estate requires the appointment of a person to handle administration of the estate. Traditionally, if there is a will, this person is usually named in the will and is called an “executor” (male) or “executrix” (female). If there is no will, this person is appointed by the probate court and is called an “administrator” (male) or “administratrix” (female). The modern trend is to use the term “personal representative” to refer to the person handling the administration of the estate, whether named in the will, court appointed, male or female. The personal representative may be an individual, a bank or a trust company.

  The personal representative takes care of the following tasks:

Caring for all property of the deceased person; Receiving payments due the estate (i.e. interest, dividends and other income); Collecting debts, claims and notes due the deceased person; Determining names, ages, addresses and relationship of all heirs if there is no will; Determining names, ages and addresses of all beneficiaries if there is a will; Investigating the validity of all claims against the estate; Paying all estate obligations including estate, inheritance and income taxes; Preparing and filing federal estate tax and Indiana inheritance tax returns; Carrying out the instructions of the probate court pertaining to the estate; Distributing the assets of the estate to the heirs.

      The probate judge supervises the work of the personal representative. These actions require the preparation and filing of numerous legal documents, the publication of notices, hearings in court, appraisals of assets of the estate, an inventory of the assets, completion of final income tax returns and possibly gift, inheritance and estate tax returns, an accounting of funds, final transfer of all assets to beneficiaries, termination of the probate proceeding, and discharge of the personal representative by the probate court. Because of the complexity of these procedures, the assistance of an attorney usually is needed.

      If the total value of all property in the deceased person's individual name is $25,000 or less, the estate can be relieved from most of these administrative requirements. In most estates, an Indiana Inheritance Tax Return must be prepared and filed. A federal estate tax return may have to be filed depending on the total value of all assets of the estate.

Why do so many people try to avoid probate?
      Due to the complexity of probate procedures, probating an estate can be a long, complicated and expensive process for most families. As fully explained below, the three primary complaints against probate and reasons given for avoiding probate are: (1) Probate takes too long; (2) Probate costs too much; and (3) Probate lacks privacy.

How long does probate take?
      Normally, it takes about 7-12 months to complete the probate of an estate. However, if a federal estate tax return is required, the administration of the estate can last more than a year. (Estate taxes are due nine months after a person’s death.) The audit of a federal estate tax return often takes another year, and the personal representative cannot safely distribute all of the estate assets until released from personal liability for estate taxes. A probate case involving a contested will or complicated claims or tax issues may take two years or more. Claims against an estate may be filed up to three months after creditors are notified of the opening of the estate or in any event no later than nine months from the date of death. Even after all taxes, claims and litigation issues are resolved, the personal representative must prepare and file a petition to close the estate and a final accounting which are normally scheduled for hearing after allowing time for publication of notice in the newspaper. If no objections are made to the final petition and accounting, the personal representative will be ordered to distribute the remaining assets and close the estate.

How much does probate cost?
      Court costs for probate in Lake County, Indiana are $150.00 to file the Petition for Probate and open an estate plus costs for publication of legal notices in the newspaper. By far, the biggest costs of probate are payment of attorney and personal representative fees for handling matters of the estate for the 7-12 months or more required to probate an estate. The probate court sets and approves the probate fees attorneys and personal representatives are allowed. In Lake County, Indiana, the probate court limits the fees that attorneys and personal representatives are allowed to a fixed percentage of the estate. Probate fees can be a maximum of 10% of the gross value of the estate (without deductions for mortgages, liens or debts). Below are the estimated combined fees of the attorney and personal representative for routine probate administration that may be allowed under the probate court guidelines in effect in Lake County Indiana:

To get a more precise estimate of attorney and personal representative fees for a particular size of estate or to get an estimate of the Indiana inheritance tax payable by each heir of an estate, please contact our office.

Is information about the deceased person's estate kept private in Probate Court?
      No.  All probate proceedings and all documents filed with the probate court are open to the public.  Anyone can access your probate file and examine the terms of your will, including beneficiary designations, and other information including the inventory and appraisal of your assets, the names and amounts owed to each of your creditors and the written accounting of all receipts and disbursements of the estate.  If you own a business, prying eyes of competitors may gain access to business information in the probate file to the disadvantage of your successors and heirs.