December 2011 "What Happens to Land and Possessions When You Die?"
What Happens to Land and Possessions When You Die?
By Trust, Estate & Elder Law Attorneys Jennifer & Jeff Hawkins
What happens to your land and possessions when you die? The answer depends on the answers to these questions: Are you married? Do you have a prenuptial agreement? Do you and your spouse own your assets together? Did you acquire all of your personal property during your marriage to your spouse? Have you added other people to the names on your bank and investment accounts so that the bank’s computer shows your name and other names on the account records? Have you made a last will and testament? Have you made a revocable or “living” trust and transferred ownership of your assets to the trust?
Indiana law requires that the assets of an unmarried person pass to his or her descendants automatically upon death. However, a court-appointed representative may sell the assets in some cases to pay the deceased person’s bills. If a married couple has children together, the surviving spouse will inherit one-half of the deceased spouse’s separate assets and the other one-half divided among the deceased person’s children. If the deceased person had children with someone other than the surviving spouse, the surviving spouse gets a smaller asset share and the asset division is a bit more complex.
Many married people make wills that leave all of their assets to the surviving spouse. A will passes asset ownership to the beneficiary of the will automatically upon the deceased person’s death. However, a will is worthless unless a lawyer presents it to the probate judge to be added to the county will record.
A deceased person’s personal property passes automatically to the surviving spouse if the couple acquired the personal property during marriage. Otherwise, personal property passes to the deceased person’s heirs under the Indiana intestate transfer statutes or to the beneficiary of the deceased person’s last will and testament (of course, it must be a valid will).
Jointly owned assets usually pass to the surviving owner when one owner dies. Similarly, a person may own almost any asset under the Indiana Transfer on Death Property Act (“TOD Act”) so that the deceased person owns the asset until death and the ownership then passes to a person named as a transfer beneficiary. The owner can name a TOD beneficiary on a bank account, vehicle title, or other ownership record. The TOD Act offers a simple estate plan tool, but its simplicity can complicate wealth transfers in complex situations.
A revocable trust, commonly known as a “living” trust, is an ownership delivery system that transfers asset ownership to trust beneficiaries after a deceased person’s death. These trusts empower people to control how their assets pass to beneficiaries creatively, but they are not appropriate for every estate plan.
A deceased person’s asset transfers require careful management and legal expertise. Missteps can trigger tax problems, title defects, and costly litigation. Experienced trust and estate lawyers can usually solve problems quickly or avoid them in the first place. As in most other life experiences, you get what you pay for in legal matters.
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