Jun 2017 AFR: 2.4%
Gift Annuity State Regulations

Indiana


Intestacy


General Definition

A decedent's intestate estate is defined as any part of the estate not effectively disposed of by a valid will.

Order of Distribution

The surviving spouse of a descendent dying intestate receives of the estate if the intestate is survived by at least one child or by the issue of at least one deceased child. 3/4 of the estate, if there is no surviving issue, but the descendent is survived by parent(s). Finally, the surviving spouse will inherit all of the estate, if there is no surviving issue or parent of the descendent. Sec. 29-1-2-1(b).

If the surviving spouse is a subsequent spouse who did not have children with the decedent and the decedent left children by a previous spouse, the surviving subsequent spouse is entitled to only 25% of the remainder of:

(1) The fair market value as of the date of death of the real property of the deceased spouse; minus
(2) The value of the liens and encumbrances on the real property of the deceased spouse. Sec. 29-1-2-1(c).

The portion of the estate not distributed to the surviving spouse is distributed as follows:

  1. To the children of the decedent, if any surviving. Grandchildren or those of more remote degrees take by representation.
  2. If there is a surviving spouse but no surviving descendants, then to the surviving parents.
  3. If there is no surviving spouse or descendants, then to the surviving parents, brothers, sisters and descendants of brothers and sisters of the decedent. However, the share of each parent may not be less than 1/4 of the estate. Descendants of deceased brothers and sisters shall take by representation.
  4. If there is no surviving parent, brother or sister then the estate passes to the descendants of brothers and sisters. Those of more remote relation take by representation.
  5. If there are no surviving descendants, parents or siblings then the surviving grandparents share the estate equally.
  6. If there is not a surviving grandparent then the estate is divided into equal shares for surviving aunts and uncles. Sec. 29-1-2-1(d).

Will Qualifications


Common Law or Community Property

Indiana is a common law property state. A surviving spouse or, if there is not one, all children under the age of 18 are entitled to an allowance of $25,000. Sec. 29-1-4-1.

Capacity

The testator of a valid will must be at least 18 years or a member of the armed services, merchant marines. The person must also be of sound mind at the time of the drafting. Sec. 29-1-5-1.

Drafting

A will must be in writing. Any person competent at the time of the testator's signing may be a witness. However, a witness should not have any interest passing to him or her through the estate. If an interest is to pass to him or her, additional witnesses should be present. If no additional witnesses are present, the interest passing to the witness is void. Sec. 29-1-5-2.

An oral, or nuncupative, will may be made only by a person in imminent peril of death, but only if the testator died as a result of the impending peril. To be valid, the will must be uttered before two disinterested witnesses and reduced to writing by or under the direction of one of the witnesses within thirty days. However, an oral will may not dispose of property in excess of $1,000 dollars, except in the case of persons in active military, in a time of war the aggregate amount may be $10,000. Sec. 29-1-5-4.

Heirs

An "heir" includes those who are entitled under the statutes of intestate succession to the real and personal property of a decedent on the decedent's death intestate, unless otherwise defined or limited by the will. Sec. 29-3-1-1(a)(11).

Modifications

No will in writing, nor any part thereof, except as in this article provided, will be revoked, unless the testator, or some other person in his presence and by his direction, with intent to revoke, destroys or mutilates the same; or such testator shall execute other writing for that purpose that is properly signed, subscribed and witnessed. A will can be revoked in part only by the execution of a writing as provided. Sec. 29-1-5-6.

If, after making a will, the testator is divorced, any provision in the will favoring the ex-spouse is void. Sec. 29-1-5-8.

Probate Process


Naming of Personal Representative

Normally, a decedent will name a fiduciary in his or her will. However, if no fiduciary is named or in the case of an intestate estate, the probate court will appoint one according to the following priority:

  1. To a surviving spouse who is a devisee in the will.
  2. To any devisee in the will.
  3. To the surviving spouse, or to the person nominated by the surviving spouse.
  4. To an heir or the person nominated by an heir or
  5. To any other qualified person. Sec. 29-1-10-1(a).

In order to receive letters, the personal representative must post any required bond and take an oath to faithfully discharge the duties according to law. Sec. 29-1-10-3.

Submission of Will

After the death of the testator, the person having custody of the decedent's will may or shall, upon written demand by the personal representative or court order, deliver the will to the court that has jurisdiction of the administration of the decedent's estate. Sec. 29-1-7-3.

Notifications

As soon as the letters of administration have been issued, the clerk of the court will publish notice of the estate administration. The notice must be published in English and in a newspaper of general circulation for two consecutive weeks. The notice must also be mailed to each heir, devisee, legatee and known creditor whose name and address is contained in the petition for probate or letters. The personal representative is charged with furnishing sufficient copies of the notice, prepared for mailing, and the clerk of the court will mail the notices upon the issuance of letters. Sec. 29-1-7-7.

(d) The personal representative must serve notice on each creditor of the decedent whose name is not set forth in the petition for probate or letters under subsection and those that are known within one month after the first publication in the newspaper. Sec. 29-1-7-7(d).

Family Allowance and the Elective Share


The surviving spouse is entitled to an allowance of $25,000. If there is no surviving spouse, the decedent's children who are under 18 are entitled to the same allowance to be divided equally among them. Sec. 29-1-4-1.

The surviving spouse, upon electing to take against the will, is entitled to 1/2 of the net personal and real estate of the testator. However, if the surviving spouse is a second or other subsequent spouse who did not at any time have children by the decedent and the decedent left surviving a child or children or the descendants of a child or children by a previous spouse, the surviving second or subsequent childless spouse will take 1/3 of the net personal estate of the testator plus an amount equal to 25% of the remainder of:

  1. The fair market value as of the date of death of the real property of the testator; minus
  2. The value of the liens and encumbrances on the real property of the testator. Sec. 29-1-3-1.

Inventory

Within two months after appointment, the personal representative must complete an inventory of the estate property. The inventory must indicate the fair market value of each item of property, including a statement of all known liens and other charges. Sec. 29-1-12-1(a).

The personal representative must provide all interested parties who request it with a copy of the inventory unless the original inventory has been filed with the court. Sec. 29-1-12-1(c).

Debts and Distributions

If the assets of the estate are insufficient to pay all claims in full, the personal representative will make payments in the following order:

  1. Costs and expenses of administration.
  2. Reasonable funeral expenses.
  3. Family and spousal allowances.
  4. Federal debts and taxes.
  5. Medical expenses of the last sickness of the decedent.
  6. State debts and taxes.
  7. All other claims allowed. Sec. 29-1-14-9.

If there is any unclaimed property from the estate, the unclaimed property will be paid over to the state treasurer to become a part of the common school fund. Sec. 29-1-17-12.

After the expiration of the time limit for the filing of claims and after all claims against the estate, including state and federal inheritance and estate taxes, have been paid, the personal representative will provide a final account and at the same time petition the court to accept the final distribution of the estate. Sec. 29-1-17-2.

Estate/Inheritance Tax


Inheritance Tax

[REPEALED] Indiana repealed it's inheritance tax for decedents dying on or after January 1, 2013. Sec. 6-4.1-11-2.

Estate Tax

Indiana also applies an estate tax. The tax is determined by following a four-step calculation. First, divide the value of the decedent's Indiana gross estate by the value of the decedent's total gross estate for federal estate tax purposes. Next, multiply the result by the federal state death tax credit allowable against the decedent's federal estate tax. The product is the Indiana portion of the federal state death tax credit. Finally, subtract the amount of all Indiana inheritance taxes paid from Indiana portion of the federal state death tax credit. The remaining value is the amount of tax owed, but may not be less than zero. Sec. 6-4.1-11-2.

Income Tax Charitable Deductions and/or Credits


Indiana allows taxpayers a credit equal to 50% of the aggregate amount of charitable contributions made during the year to postsecondary educational institutions located within Indiana. The amount allowed as a credit cannot exceed $100 for single filers or $200 for joint filers. Sec. 6-3-3-5.

Gift Annuity Requirements


Indiana is a "conditional exemption" state.

Exemption Qualifications

Indiana, a "conditional exemption" state, exempts issuance of charitable gift annuities under Indiana Code Sec. 27-1-12.4-2 from insurance regulation so long as the transaction is part gift and part investment and is excluded from "acquisition indebtedness" as defined in Sec. 514(c)(5).

Disclosure Language

Indiana does not require specific disclosure language in an issuing charity's gift annuity contracts.

Reserve Requirements

Indiana does not require an issuing charity to hold any amount in reserve.

Annual Filing Requirements

No annual reporting is required.

State Forms

None
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