The Legal Tool You Can Use To Avoid Probate
By: Eric N. Allen May 2017
Probate is the legal procedure whereby a court administers the distribution of a decedent’s property following his death. For persons who have a will, the administration is referred to as “testate” and for persons with no will, the administration is referred to as “intestate”. The complex, and sometimes arcane procedures, are designed to protect all beneficiaries, and in particular, those beneficiaries whose interests have been established by law, and not through a designation in a will. Because the administration of a supervised estate can sometimes be time-consuming, drawn out and expensive; people have sought various means to avoid the probate procedure. Included within those methods have been lifetime gifts, jointly owned property, and the use of trusts which do not require court supervision.
No single tool is appropriate for every situation and people embarking upon estate planning are encouraged to seek competent advice to determine the best tool(s) that fit their personal needs and desires. Recently, Indiana provided to estate planners one additional planning tool for their tool box. That tool was provided by the passage of the Indiana Transfer on Death Property Act.
Persons familiar with the manner in which bank accounts can be held may have heard of “Payable on Death” (POD) accounts. Indiana no longer limits such transfers to bank accounts. Under the Transfer on Death Property Act, an individual can title their real estate, intangible accounts (bank, brokerage, etc.) and tangible personal property (vehicles, household goods, clothing) by making a Transfer on Death (“TOD”) designation. The primary advantages of utilizing a TOD designation are that the owner remains the owner of the property during his lifetime, and reserves the right to eliminate the designation at any time. Secondly, the TOD beneficiary receives the property immediately upon death (subject to certain proof of death requirements) and the transfer bypasses probate.
The proper use of TOD designations, when combined with a well-crafted estate plan, can dramatically reduce the expense and delay that are frequently inherent in an estate administration utilizing the probate procedures. To learn more about Transfer on Death designations, contact the attorneys at ALLEN WELLMAN McNEW HARVEY, LLP at (317) 462-3455.