The Indiana legislature was quite busy this past session regarding probate and trust law when it passed HEA 1205, HEA 1208, SEA 66, SEA 67 and SEA 193.  This update will focus on SEA 67, which became effective July 1, 2022. 

For several years, there have been efforts to raise Indiana’s “small estate” threshold from $50,000.00 to $100,000.00.  For decedents dying prior to July 1, 2006, the small estate threshold is $25,000.00.  For decedents dying after June 30, 2006 and before July 1, 2022, the small estate threshold is $50,000.00.  Now, after several unsuccessful attempts, the legislature successfully passed SEA 67 which increased Indiana’s small estate threshold from $50,000.00 to $100,000.00 effective July 1, 2022.  

What this means is that assets in the decedent’s individual name only (assets which do not have joint owners or beneficiaries named) can be transferred to the decedent’s intestate heirs (provided the decedent did not have a Last Will and Testament) or to the devisees and legatees under the decedent’s Last Will and Testament using a “small estate affidavit” pursuant to I.C. § 29-1-8-1.  The value of the assets, less liens encumbrances and reasonable funeral expenses, cannot exceed the sum of $100,000.00.  If that is the case, you can forego opening a formal probate estate and utilize Indiana’s small estate affidavit statute to transfer the assets to the individuals entitled to them.  

The small estate affidavit must contain the following representations:

(1) That the value of the gross probate estate, wherever located,

(less liens, encumbrances, and reasonable funeral expenses) does not exceed:

(A) twenty-five thousand dollars ($25,000), for the estate of an individual who dies before July 1, 2006;

(B) fifty thousand dollars ($50,000), for the estate of an individual who dies after June 30, 2006, and before July 1, 2022; and

(C) one hundred thousand dollars ($100,000), for the estate of an individual who dies after June 30, 2022.

(2) That forty-five (45) days have elapsed since the death of the decedent.

(3) That no application or petition for the appointment of a personal representative is pending or has been granted in any jurisdiction.

(4) The name and address of each distributee that is entitled to a share of the property and the part of the property to which each distributee is entitled.

(5) That the affiant has notified each distributee identified in the affidavit of the affiant’s intention to present an affidavit under this section.

(6) That the affiant is entitled to payment or delivery of the property on behalf of each distributee identified in the affidavit.

If a motor vehicle or watercraft is involved, you only need to wait 5 days (instead of 45 days) to present a small estate affidavit to the BMV to transfer the title.  The BMV has its own form affidavit (State Form 18733) that you can use to transfer the title. 

Enactment of SEA 67 will provide more families with the opportunity to transfer their loved one’s assets via small estate affidavit instead of dealing with the cost and delay of a formal probate estate.  That being said, it is recommended that you be proactive and establish an estate plan during your lifetime and not rely on Indiana’s new small estate threshold of $100,000.00 to transfer your assets.  It would be unfortunate for your family to be faced with opening a probate estate if the value of your estate, less liens and encumbrances and reasonable funeral expenses, totaled $100,100.00.  Proactive planning, utilizing a Revocable Trust or Transfer-on-Death beneficiary designations to avoid the probate process, is far more cost effective in the long run.  

Please note that this post is only a brief summary of SEA 67 and does not constitute legal advice nor does it establish an attorney/client relationship.  Should you have specific questions regarding the above, please contact Benjamin T. Ballou at Hodges and Davis, P.C.