Formal Estates in Indiana
What is the difference between informal and
formal estates? Or here in Indiana, we call them supervised or
unsupervised estates. The difference is the court's interaction or
A person's estate or probate assets are only assets that
are in his or her name alone that will be subject to estate administration.
In unsupervised estates, the will is probated or the
estate is opened and a personal representative is appointed by the court. After
the appointment, the personal representative is able to act without filing
pleadings for the court's authority to sell real estate, personal property,
cars, stock, and deal with inheritance and income taxes. An Inventory must be
prepared. After the estate is complete, the personal representative files a
closing statement to close the estate after ninety (90) days, if no objections
are filed. This does not mean that the personal representative does not have a
duty to administer the estate properly.
Advantages of unsupervised estates:
would you use unsupervised estates:
When the will directs that the estate be administered as
Consents can be obtained from all of the heirs or
legatees under the will, which consents can be incorporated into the petition
for probate or petition for issuance of letters, if the will does not direct
Generally when there is only one beneficiary or the
family is very close and they can work together, then no court interaction
would be needed.
à Note. All
interested parties in an unsupervised estate, still have the opportunity to ask
the court to convert it to a supervised administration should there be cause or
suspicion to do so.
à This does not
mean that the personal representative does not have a duty to get the most value
for all assets and properly administer the estate.
In supervised estates, the will is probated or the estate
is opened and a personal representative is appointed by the court. After the
appointment, the personal representative must seek court approval to sell real
estate, personal property, cars, stock, or any other asset of the estate. This
usually entails the need for appraisals and consents from the beneficiaries or
the requirement of a hearing on the majority of the aspects of the estate. An
Inventory must be prepared and filed with the court. After the estate is
complete, the personal representative must file a detailed accounting showing
all income with receipts for all expenditures made during the administration of
the estate. The legal fees are generally higher because there is more
interaction with the attorney and the court.
Advantages of a supervised estate:
Can get court approval to sell property or real estate
Can file a Petition for Instructions or a Petition to
Construe the Will if language is unclear
Is generally used when there is no will and the heirs are
A court can determine the legal heirs by decree
A court can approve sales by public or private sale
A court can hear any claim or settle any matter
When would you use supervised estate:
When the decedent died without a will and the heirs are
When the estate has controversies within the family
When there are several parcels of real estate or major
When you must sell unique collections and personal
When you want detailed inventories, appraisals and a
When there are tax issues not set out in the will.
When you need the court to issue an order.
Because most estates are different, it is best to have an
attorney review the assets and liabilities of the particular estate to properly
advise you what administration best fits. This often depends on how the
beneficiaries interact with each other, the size of the estate, type of assets,
whether there is an on-going business, tax issues or if any problems are
anticipated. Finding the right attorney is important.
Attorneys who are not experienced with probate law can
cause unnecessary delays, charge you for learning the procedure, or miss
valuable tax savings or advantages to the estates. The personal
representative has responsibility for the estate – so starting with the right
attorney is a step in the right direction. Please feel free to call or
email me for a free initial consultation. If I can not help you or if you
are better served by an attorney closer in proximity, I would be happy to
recommend someone to assist you or act as a co-counsel with me, if your estate
will need to be litigated. Most pleadings can be done by mailing, so call
me if you have a question or I can help.
Not all Wills have to be probated or estate have to be
administered with court involvement. If the assets are
under $50,000, Indiana law provides a small estate procedure to administer
the estate. I recommend a Petition to Spread the Will of
Record be prepared and file with the court to give notice.