Irrevocable Trust Law in Indiana

What Are Irrevocable Trusts Used For?

This class of trust instruments has a wide variety of applications aimed at the distribution, preservation, and protection of an estate’s assets. There are a variety of circumstances and scenarios that call for the tools and facilities that irrevocable trusts legally provide us with. These include:

• To diminish or deplete your assets to qualify for government benefits and tax breaks such as Medicaid, Social Security, etc. The same applies to those hoping to secure special care or benefits for dependants with special needs.
• Death proceeds are excluded from the cumulative estate asset portfolio to protect a life insurance policy.
• To facilitate friendlier tax obligations to principal properties (family homes) if you intend to present them as gifts to your children.
• They exclude assets expected to appreciate from tax deductions while maintaining their step-up tax-assessment viability.
• To provide guardrails that protect trust assets from potential misuse by the designated beneficiaries by outlining specific distribution instructions.
• To benefit from the estate tax exemptions by excluding taxable assets from the estate portfolio because all the property attached to an irrevocable trust will not be counted toward the estate’s gross value.

When is Probate Required in Indiana?

The probate process is a court-supervised legal mechanism that occurs when a person passes away without a will (intestate). It’s designed to ensure that the deceased person’s assets are equitably distributed among their heirs, creditors, and the state (in the form of owed taxes). In Indiana, probate courts will only intervene in the proceedings if the decedent fully owns the assets in question.

The probate court process can be complex and expensive depending on the estate’s circumstances, which is why many people try to avoid it by establishing trusts and setting down their wills in good time.

What to Know About Indiana Affidavit Successor Trustee Laws

If a trustee passes away or somehow becomes incapacitated during their duty, the task will fall to what’s known as a Successor Trustee. This process is facilitated by the creation of an Affidavit of Successor, which is a legal document officially designating the person who is to take over. In Indiana, this process can be carried out without disclosing the full terms of the initial Trust Agreement.

Indiana Trust Accounting Requirements

According to Indiana State Code Title 30,which deals with Trust and Fiduciary law, there are specific vital responsibilities that a trust attorney or trustee needs to adhere to. These include:

• Carrying out regular account reconciliation involves comparing your personal accounting records with the trust asset records to ensure no discrepancies.
• Maintaining an accurate and up-to-date accounting journal that tracks every transaction affecting the trust accounts.
• Maintaining accurate and detailed ledgers covering all the clients and beneficiaries attached to the trust.
• Keeping accurate records of all the disbursements made from the account to designated beneficiaries, creditors, and so on.

Picking the Best Trust Litigation Attorney in Indiana

Choosing the right lawyer can be daunting no matter the circumstances, but figuring out which trust litigation lawyer will best represent you can be especially challenging. There are a few key factors you should always pay attention to before you make your final decision, and these are:

Specialization: Not all lawyers are created equal. Different legal issues will require different legal skills, which is why specialist lawyers exist. A specialized litigation attorney will have an in-depth understanding of your case’s laws, regulations, and nuances. They will be able to ascertain precisely what you need and guide you to a successful resolution.
Experience: The best training in the world is no substitute for experience in the real world of legal proceedings. Seek out attorneys who have a demonstrable track record of courtroom success over a respectable period.
Previous Client Referrals: Because attorneys rarely advertise through traditional avenues, the best way to determine their competency is to consult their previous clients. If you cannot identify or reach specific clients they might have represented in the past, check out reliable legal review sites, social media posts, and online forums that might give you an insight into their standing and reputation.

Contesting a Trust in Indiana

Many of us live under the false impression that we can contest or object to the terms of a trust agreement whenever we disagree with them or feel that we’ve been awarded less than we’re entitled to. In Indiana, you will need to fulfill specific legal requirements before you can initiate a trust contest with the aim of rendering it invalid. Before a probate court agrees to hear or make a decision regarding a trust, you will need to demonstrate that it has a deficiency of some sort. Potential deficiencies might include:

• A new trust was established that invalidated the original trust
• The appointed trustee has been mismanaging the trust asset portfolio
• Documents relating to the trust have been altered or forged without the consent of the trust’s creator (grantor)
• The grantor drew up the terms of the trust under coercion, duress, or under the pressure of undue influence (which can be proven or shown)
• The trust creator was not mentally fit and competent at the time the trust was being created.

Probate Fee Regulations in Indiana

Whenever an estate has to be administered under the auspices of a probate court, there will be charges associated with the process. In typical cases, these costs will range between 2 percent and 4 percent of the total asset portfolio’s worth. Because of the increased complexity and logistics involved in supervised administration (where the courts take the role of determining every disbursement) relative to unsupervised administration, it will generally cost the estate more.

How are Damages Determined Should a Breach of Fiduciary Duty Take Place?

When a trustee fails to perform the role placed upon them, they may be liable to charges of breaching their fiduciary duties. Probate courts determine the consequences of such actions by considering the level of harm caused and how far from their obligations the trustees strayed. Depending on the circumstances of the case, they may be liable to punishment in the form of:

• Equitable remedies: Non-monetary penalties and solutions such as dismissal from their trustee position, injunctions to restrict further harmful activity, or the installment of supervisory accountants.
• Punitive damages: In cases of particularly damaging conduct, such as fraud, the disgraced trustee may be ordered to pay sums that will not only affect the trustee but deter other trustees from potentially engaging in the same behavior in the future.
• Compensatory damages: These are designed to reimburse the estate for any financial losses incurred as a direct result of the trustee’s actions or inactions.

When do Co-Trustees Need to Act Jointly in Indiana

Because of the considerable responsibilities placed on the shoulders of trustees, some grantors will assign multiple trustees. This might be especially advisable should the asset portfolio be of considerable magnitude. In Indiana, there are certain preconditions and constraints placed on the actions of trustees. These include:

• Co-trustees must act jointly and sign off on all decisions, even in cases where decisions may be made via majority votes.
• In case the trust terms do not make specific allowances for majority decisions, Indiana courts insist that all trust decisions must be made by unanimous agreement.
• Whenever third parties are to be involved in actions involving the trust, all trustees must be involved in the decision-making (unless otherwise indicated in the trust documentation).

Final Thoughts

Irrevocable trusts are highly useful legal instruments that can be used to offer us a variety of benefits. To make the most use of them, however, you need to find the right trust litigation attorney to partner with. You need a team with the skills, experience, and dedication required to fight for you to their utmost ability.

Hess-Verdon & Associates PLC has a long history of stellar success in trust and probate litigation and is ready to help you achieve the best outcome in all your legal pursuits. Schedule your consultation today. You won’t regret it!