Benjamin T. Ballou | Hodges & Davis Law Firm Northwest Indiana

The Indiana legislature was quite busy this past session regarding probate law (HEA 1252, HEA 1255 and SEA 276) and health law (SEA 204).  This update will focus on HEA 1252, which became effective July 1, 2021.

A.    Technical corrections were made to I.C. § 29-1-7-15.1 to change the references in statute from “estate” to “property” (i.e., “real property” instead of “real estate”).

B.    Changes were made to I.C. § 29-1-7-15.2 regarding the protection afforded to real estate and proceeds of the sale of such real estate.  Generally, I.C. § 29-1-7-15.1(b) provides that an executor/administrator cannot sell real property to pay any debt or ligation of the decedent which is not a lien of record in the county where the property is located, or pay any costs of administration, unless a petition for administration is filed not later than 5 months after death and the clerk issues letters not later than 7 months after death.  Per the amendments to I.C. § 29-1-7-15.2, if the personal representative of the estate sells the real property to satisfy a lien of record in which the real estate is located, pay costs of administration, or use the proceeds for any other payment or distribution approved by the written consent of a majority in interest of the estate distributees (per I.C. §29-1-10-21), the proceeds of such sale retain the same protection that I.C. § 29-1-7-15.1(b) provides regarding payment of any debt or obligation not described above.

C.     A new statute was added to the probate code regarding a “tenant’s representative”.  I.C. § 29-1-8-11 sets forth the process by which an individual appointed as a tenant’s representative under I.C. § 32-31-1-23 (established under this same legislation and discussed below) can exercise authority on behalf of a deceased tenant.  The statute allows the tenant representative to collect all or part of the deceased tenant’s security deposit; collect the deceased tenant’s personal property from the residence; distribute any portion of the security deposit to the deceased tenant’s distributees; distribute the deceased tenant’s tangible personal property to the deceased tenant’s distributees; and execute a small estate affidavit pursuant to I.C.§ 29-1-8 on behalf of the deceased tenant’s distributees and present it to the landlord to obtain the security deposit and tangible personal property.

If an estate is opened, and the deceased tenant’s representative is provided with letters testamentary or letters of administration, the tangible personal property must be delivered to the named personal representative of the estate.

The tenant’s representative is required to keep complete records of all transactions for 9 months after death, or 3 months after the records are delivered to the personal representative of the estate, whichever occurs first.

A written accounting must be rendered by the deceased tenant’s representative pursuant to a court order (which can be entered at any time) or written demand received from a child of the deceased tenant, the personal representative of the deceased tenant’s estate or an heir/legatee of the deceased tenant (which must be requested within 9 months of death).  The accounting must be delivered to the court, the personal representative of the deceased tenant’s estate, an heir/legatee, or a child of the deceased tenant.  The accounting must be delivered within 60 days.  Only 1 accounting is required in a 12-month period.  If the deceased tenant’s representative fails to deliver an accounting, the court or the person demanding the accounting may initiate a mandamus action to compel the provision of an accounting.  If the court finds that the deceased tenant’s representative failed to render an accounting without just cause, attorney’s fees and court costs may be awarded.

A deceased tenant’s representative can proactively request a court to review and settle his/her account.  The petition must be filed with the court exercising probate jurisdiction in the county where the deceased tenant resided, and the filing fee is a legitimate expense of the deceased tenant’s estate.  Trust code provisions governing a trustee’s petition to settle and allow an account govern this same type of process (see I.C. § 30-4-5-14(b), (c), (d) and I.C. § 30-4-5-15).  The petition must be served on the personal representative of the deceased tenant’s estate, any person beneficially interested in the estate, the deceased tenant’s heirs at law, the named personal representative in the deceased tenant’s Last Will and Testament that was probated without administration (i.e., “spread of record”) and the persons or entities listed therein as beneficiaries, and any other person the court directs.  If the court reviews and approves the account, and proper notice is provided, the deceased tenant’s representative is discharged from liability and is binding upon all interested persons (except in cases of fraud, misrepresentation, inadequate disclosure or failure to provide proper notice).

D.     Changes were also made to I.C. § 29-3-12-1, which governs termination of a guardianship.  I.C. § 29-3-12(e) sets forth the specific powers a guardian may exercise after the protected person’s death.  If the court approves the payment of expenses and obligations under this statute, then the guardian shall pay certain expenses and obligations in amounts approved by the court in the decreasing order of priority:

    • final administration expenses of the guardianship approved by the court;
    • reasonable expenses for funeral, tombstone, monument, or other marker and disposition of the bodily remains (subject to the limitations provided in I.C. § 29-1-14-9(a)(2));
    • statutory allowances to the protected person’s surviving spouse or surviving child under I.C. §29-1-4-1;
    • debts disclosed to the court and which could be filed and allowed as claims under I.C. § 29-1-14, having the priority and preference established under I.C. §29-1-14-9(a)(4);
    • reasonable expenses of last illness disclosed to the court and which could be filed and allowed as claims under I.C. § 29-1-14, having the priority and preference established under I.C. §29-1-14-9(a)(5);
    • debts disclosed to the court and which could be filed and allowed as claims under I.C. § 29-1-14, having the priority and preference established under I.C. §29-1-14-9(a)(6);
    • any other obligations disclosed to the court and which could be filed and allowed as claims under I.C. § 29-1-14, having the priority and preference established under I.C. §29-1-14-9(a)(7).

E.     The definition of “Principal” under the Power of Attorney Act found at I.C. § 30-5-2-18(1)(A) now includes an individual who is at least 18, emancipated, or currently serving in the U.S. military.

F.     As referenced above, a new statutory scheme for a deceased or incapacitated tenant was implemented.  I.C. § 32-31-1-23 imposes duties on the landlord who has knowledge of a deceased tenant who was the sole occupant of the premises.  Specifically, the landlord must do the following:

    • notify the tenant’s representative of the tenant’s death;
    • provide access to the premises for the tenant’s representative to remove personal property therefrom;
    • deliver the security deposit and unearned rent to the tenant’s representative (the landlord can required the tenant representative to prepare and sign an inventory related to any tangible personal property removed from the premises).

If a landlord believes a sole occupant tenant is incapacitated and absent from the premises, the landlord must notify the tenant’s representative of such incapacity.  The landlord must also give the tenant’s representative access to the premises to remove personal property.  Again, the landlord can required the tenant representative to prepare and sign an inventory related to any tangible personal property removed from the premises.  The landlord must also deliver the security deposit and unearned rent to the tenant’s representative.

This new statute also sets forth who can accept an appointment and serve as a tenant’s representative, in the following order of priority:

    1.      A person designated by the tenant in a written document delivered to the landlord.
    2.      A person designated, in writing, by the tenant in a written lease between the tenant and the landlord.
    3.      An attorney in fact named by the tenant in a power of attorney during the tenant’s lifetime.
    4.      A temporary guardian or guardian of the person of a tenant.
    5.      A tenant’s heir.
    6.      A person selected and appointed by a probate court upon a petition by any interested person under this section.

If a dispute exists between two (2) or more persons claiming to be a tenant’s representative, the probate court’s decision controls after a hearing held upon notice to the interested persons.  To accept an appointment, the individual must providing written notice to the tenant’s landlord of the tenant representative’s acceptance of appointment.  If the tenant is appointed by the probate court, acceptance is achieved by complying with the conditions stated in the probate court’s order.

How long does the authority of the tenant’s representative last?  Once a deceased tenant’s heir, a deceased tenant’s attorney in fact, a temporary guardian, or a guardian of the person knows that a personal representative has been appointed for the deceased tenant’s estate; a tenant’s attorney in fact is acting on the living tenant’s behalf; or, a guardian has been appointed for the living incapacitated tenant’s property, then the authority terminates.

What liability does a landlord have?  If the landlord complies with these statutory requirements, there is no liability to the tenant, if the tenant is living; to the tenant’s estate, if the tenant is deceased; or, to any other person that has a claim or interest in the personal property removed from the premises, unearned rent, or security deposit.  However, a landlord that willfully violates subsection (a) or (b) is liable to the tenant, if the tenant is living; or, to the tenant’s estate, if the tenant is deceased, for actual damages.

In addition to the rights provided in this section, the tenant’s representative has the incapacitated or deceased tenant’s rights and responsibilities under I.C. § 32-31-4 (which addresses moving and storage of a tenant’s property).

 

 

Please note that this post is only a brief summary of HEA 1252 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.

 

Hodges & Davis, P.C.-September 2021

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