Indiana Wills vs. Trusts
Estate planning in Indiana can be straightforward and manageable. The Hoosier State provides several distinctive estate planning options, including transfer-on-death designations for both real property and vehicles, expedited probate procedures for estates valued under $50,000, and the unique ability to use video recordings as evidence of will validity. Combined with Indiana’s absence of state inheritance and estate taxes and its flexible approach to will interpretation, knowing whether to choose a will or trust for your situation can help your family avoid unnecessary complications, reduce costs, and minimize delays while ensuring your final wishes are properly carried out.
Table of Contents
US Map For The Different Will and Trust Requirements by State
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Indiana Will Requirements
An Indiana Last Will and Testament should include:
- Age and Capacity: Testator must be “of sound mind” and at least 18 years old (or under 18 if a member of the armed forces or merchant marine)
- Format: Must be in writing
- Signature: Must be signed by the testator
- Witnesses: Must be signed by two witnesses
Witness Requirements
For Indiana wills:
- The witnesses must either observe the testator sign the will, observe the testator authorize someone to sign for the testator, or hear the testator declare that the signature is genuine
- The signature of each witness must be observed by the testator and by the other witness
Interested Witnesses
Self-Proved Wills
Although notarization is not necessary for an Indiana will to be an effective testamentary document, Indiana law allows a will to be “self-proved” if:
- It includes a self-proving clause or an affidavit with a self-proving clause is attached to the will
- When present, a self-proving clause or affidavit serves as evidence of the will’s authenticity and allows for admission in probate without further witness testimony
Videotape Evidence
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Amendment, Revision, and Revocation of Indiana Wills
Revoking an Indiana Will
An Indiana will may be revoked through:
- Physical destruction or mutilation of the document with the intent that it be revoked
- Execution of a separate written instrument which states the testator’s intent to revoke the will and satisfies the formalities required for creation of a will
Amending an Indiana Will
Indiana wills may be amended or revised through:
- Execution of a codicil (an addendum to an existing will). To effectively amend a will, a codicil must satisfy all legal requirements applicable to the creation of a will
- The terms of a will may also be amended by executing a later will which revokes the prior will and includes the revised terms
Automatic Revocation by Divorce
Children Born After Will Execution
If a child is born to or adopted by a testator after execution of a will:
- If the testator’s will does not provide for or appear to intentionally omit the child—the child inherits the same share of the estate the child would have inherited had the testator died intestate
- However, an afterborn child does not receive an intestate share if the testator had at least one other child when making the will and left substantially all of the estate to a surviving spouse
Holographic and Oral Wills
Holographic Wills
Indiana law does not recognize holographic (or handwritten) wills. A will written in the testator’s handwriting must satisfy all other requirements for creation of a valid will to be admissible in probate.
Oral (Nuncupative) Wills
Indiana recognizes oral (or “nuncupative”) wills under limited circumstances:
- The testator must make the statements while in imminent peril of death (including by sickness) from which the testator does not survive
- A testator’s declaration of an oral will must be heard by two witnesses, reduced to writing by a witness within 30 days of the statements, and submitted for probate within six months of the testator’s death
- Indiana nuncupative wills are only effective for dispositions of personal property—and only property valued up to $1,000 (increased to $10,000 for active servicemembers during time of war)
Indiana Trust Requirements
Capacity Requirements
When creating an Indiana trust, the settlor must have adequate legal capacity:
- For revocable trusts, capacity is determined under the same standard applicable to wills
- To create an irrevocable trust and direct the actions of the trustee, the settlor must be of sound mind, capable of understanding the nature and effect of the trust, at least 18 years old, and capable of holding or dealing with property
Trust Creation Requirements
Trust Instrument Requirements
A trust instrument must identify with reasonable certainty:
- The property subject to the trust
- The trustee’s and beneficiaries’ identities
- The nature of the interests held by the trustee and beneficiaries
- The trust’s purpose
Trustee Requirements
Trustees must be:
- At least 18 years old
- Of sound mind
- Of good moral character
A trustee may also be a corporation capable of dealing with property on its own and empowered to act as a trustee.
Trustee Powers and Duties
- The trustee of an Indiana trust must have actual powers or duties relating to trust property
- Any power or duty which requires a trustee to commit an act which is criminal, tortious, or contrary to public policy is invalid
- If a trustee invests trust property, the trustee must do so in a prudent manner, with due consideration to the trust’s purposes, terms, and circumstances
Sole Trustee/Beneficiary Rule
Beneficiary Requirements
Although an Indiana trust must have an identifiable beneficiary, Indiana law allows the beneficiary to be:
- An animal
- An individual to be ascertained in the future
- Someone a trustee is empowered to select from among an indefinite class
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Special Considerations
Estate Taxes
No State Estate or Inheritance Tax
Indiana does not impose any state-level estate tax. Large Indiana estates may still qualify for the federal estate tax. Indiana also does not have an inheritance tax.
Simplified Probate
Small Estate Procedures
Indiana law provides a streamlined probate process for “small estates” (defined as under $50,000). If an estate qualifies, the personal representative can distribute estate assets without going through the ordinary, full probate process. Simplified probate generally allows for quicker, less expensive administration.
Non-Probate Transfers
Transfer-on-Death (TOD) Deeds and Vehicle Titles
TOD Real Estate Deeds and Vehicle Titles
Indiana is one of the few states that recognize TOD designations on both real estate deeds and vehicle titles. In either case, an asset with a TOD designation automatically transfers to the named beneficiary upon the owner’s death, but the beneficiary does not acquire present rights over the asset until death actually occurs.
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Wills vs. Trusts: Comparison
| Feature | Wills | Trusts |
|---|---|---|
| When It Takes Effect | After death | Can be immediate (living trust) or after death (testamentary trust) |
| Probate Process | Requires probate | Assets in trust avoid probate |
| Privacy | Public record | Generally private |
| Challenges | Can be challenged in probate court | More difficult to challenge |
| Cost to Create | Generally less expensive | Usually more expensive |
| Ongoing Administration | None until death | May require ongoing management |
| Protection During Incapacity | None (requires separate power of attorney) | Can provide management if grantor becomes incapacitated |
| Indiana Special Feature | Videotape evidence for will authenticity; limited oral wills | Allows animal beneficiaries; TOD deeds for real estate and vehicles |
Conclusion
Creating a will or trust does not have to be difficult or intimidating for Indiana residents. However, certain circumstances—like second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests—can add complexity and result in unforeseen consequences.
Indiana offers unique estate planning tools including transfer-on-death designations for both real estate and vehicles, videotape evidence for will authenticity, and simplified probate for small estates under $50,000. The state’s flexible approach to will interpretation generally favors finding that a document is a valid will when possible.
With no state estate or inheritance taxes, Indiana provides residents with a favorable environment for estate planning. The state’s spousal protection laws ensure that a surviving spouse receives a fair share of the estate, with special provisions for blended families.
When any out-of-the-ordinary issues are present, it’s advisable to consult with an experienced attorney familiar with and licensed under Indiana law to ensure your estate plan takes full advantage of the state’s provisions while avoiding potential pitfalls.
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FAQs: Indiana Wills and Trusts
Q: What are the requirements for a valid will in Indiana?
A: A valid Indiana will must be in writing, signed by the testator (who must be at least 18 and of sound mind, or under 18 if in the military), and signed by two witnesses. The witnesses must observe the testator sign or acknowledge the signature, and each witness must sign in the presence of both the testator and the other witness. While notarization isn’t required, a will can be made “self-proved” with a notarized affidavit, which simplifies the probate process. Uniquely, Indiana law allows videotape evidence to help establish a will’s authenticity, the testator’s capacity, and proper execution.
Q: Does Indiana recognize transfer-on-death deeds?
A: Yes, Indiana is one of the relatively few states that recognizes transfer-on-death (TOD) designations for both real estate deeds and vehicle titles. This powerful estate planning tool allows you to designate a beneficiary who will automatically receive your property upon your death, while maintaining complete control during your lifetime. The property transfers outside of probate, potentially saving significant time and money. The beneficiary has no rights to the property until your death, and you can change or revoke the designation at any time before death.
Q: Are oral wills valid in Indiana?
A: Indiana does recognize oral (nuncupative) wills, but only under very limited circumstances. The person must be facing imminent death from which they do not survive. The oral will must be declared before two witnesses, and one witness must reduce it to writing within 30 days. It must be submitted for probate within six months of death. Even when valid, oral wills in Indiana can only distribute personal property worth up to $1,000 (increased to $10,000 for active military personnel during wartime). Given these strict limitations, a written will is strongly recommended for effective estate planning.
Q: How are surviving spouses protected under Indiana law?
A: Indiana provides strong protections for surviving spouses through its elective share laws. A surviving spouse can claim an elective share regardless of what the will provides. Generally, this share equals 50% of the estate. However, if the surviving spouse is not the decedent’s first spouse and the decedent left children or grandchildren, the elective share is reduced to one-third of personal property and one-fourth of real estate. In intestate cases (no will), a surviving spouse receives the entire estate if there are no children or parents, one-half if there are children, or three-fourths if there are parents but no children. These rights can be waived through a valid prenuptial agreement.
Q: Can I avoid probate with a small estate in Indiana?
A: Yes, Indiana offers a simplified probate procedure for “small estates” valued under $50,000. If an estate qualifies, the personal representative can distribute assets without going through the full probate process, saving considerable time and expense. For larger estates, consider other probate-avoidance strategies like living trusts, transfer-on-death deeds for real estate and vehicles, payable-on-death designations for financial accounts, or joint ownership with right of survivorship. Indiana’s lack of estate and inheritance taxes makes it easier to plan efficient transfers to your heirs.
Q: What happens if I name an interested witness to my will in Indiana?
A: If one of your witnesses has a beneficial interest under your will (an “interested witness”), the will itself remains valid, but any provisions benefiting that witness become void. However, the interested witness can still receive a share up to what they would have received had you died without a will (intestate share), as long as this doesn’t exceed what the will originally provided them. To avoid complications, it’s best practice to use completely disinterested witnesses who have no beneficial interest in your will when executing your estate planning documents.
Q: Can I create a trust for my pet in Indiana?
A: Yes, Indiana law specifically allows trusts with animals as beneficiaries. This means you can create a legally enforceable trust to provide for the care of your pets after your death or during your incapacity. The trust must identify the animal with reasonable certainty and include provisions for the animal’s care. You’ll need to designate a trustee to manage the funds and carry out your instructions, and you may want to name a trust protector to ensure the animal is properly cared for. The trust terminates upon the death of the animal beneficiary. This provides peace of mind that your beloved pets will receive proper care according to your wishes.
