Roles and Documents for Estate Planning

Below is a summary of the roles and documents that may be designated and the documents that can be used in estate planning. It is meant to be an overview and not an exhaustive set of possibilities or considerations. An attorney should be consulted to hear your goals and intentions to assist you with what documents and terms will best help you reach your goals.

ROLES:

• Power of Attorney (POA): This person has authority during your lifetime, but it ceases at your death. They handle your personal business affairs during your lifetime, including paying bills, negotiating payments, signing contracts, selling or transferring property, etc., if you become incapacitated (e.g., in a coma or severely ill). It's recommended to name at least one alternative. It is possible to allow someone to act as POA even if you are not incapacitated, for a specific period or transaction.

• Health Care Representative (HCR): This person makes healthcare decisions on your behalf if you are unable to do so. They also have access to your healthcare records and can consult with healthcare providers.

• Personal Representative (PR): This person manages your estate after your death, once appointed by the Court. They gather your assets, pay your debts, and transfer your estate according to your Last Will & Testament (LW&T).

• Testator: The person making a LW&T.

• Guardian: This person is responsible for the well-being (health, education, etc.) of a minor or incapacitated person or for managing the estate of such individuals. For minors, a guardian is required for both their person and estate if the estate is valued over $1500.

• Trustee: This person manages the assets in a trust, holding them in a fiduciary capacity for the benefit of the trust's beneficiaries. Once the trust is terminated, the trustee’s duties end.

• Grantor of a Trust: The person who creates a Trust during their lifetime and places property into it.

One person can take on multiple roles, or two people can act jointly for a role. Alternatives for each role should be named as well.

DOCUMENTS:

• Power of Attorney (POA): This document allows someone to manage your financial affairs during your lifetime, either when you're absent, incapacitated, or for a specific transaction. It does not take away your power to act for yourself and is ineffective after death. It can be used to designate a Healthcare Representative and Guardian if needed.

• Living Will: This document expresses your desires regarding the use of feeding tubes and hydration tubes if you are deemed incurable and near death. You can declare your wish to not receive or to have them removed, or leave the decision to your HCR.

• Last Will & Testament (LW&T): This document specifies how your property will be distributed after your death and names the PR to administer your estate.

• Trusts: There are various types of trusts, including:

  • Testamentary Trust: Takes effect upon death, typically included in a LW&T, and is used to manage property for a minor or other beneficiaries.

  • Revocable Trust: Can be modified during your lifetime. The grantor is typically the initial trustee.

  • Irrevocable Trust: Cannot be modified once signed. The trustee is bound to follow the trust's terms strictly.

• Transfer on Death Deed: This document transfers real estate directly to a beneficiary upon death, bypassing the LW&T or Trust.

• Jointly Titled Property: Property like car titles or jointly owned accounts automatically transfers to surviving owners upon death, unaffected by the terms of a LW&T or Trust.

• Named Beneficiary Transfer: Property like life insurance proceeds or financial accounts can transfer directly to a beneficiary outside a LW&T or Trust.

Indiana does not have an inheritance or estate tax, but inheritors from outside Indiana may face estate taxes in their state. Federal estate taxes apply to estates over $13.61 million for an individual or $27.22 million for a couple (as of 2024).

Contact us today to schedule a consult.

WILL vs TRUST

(This is not an exhaustive summary, but notes some differences & similarities between these documents)

WILLS:

• A Last Will & Testament (“Will”) must go through the Probate Process. The Probate Process has been around for many decades and has become more streamlined in recent years. If the Will includes a provision for the administration to be unsupervised & the Court approves the unsupervised administration, the Executor/Personal Representative (“Executor”) does not need to get the Court’s permission to sell or transfer property, no inventory is required to be filed, and there are no hearings, barring a Will contest or objection to the administration.

• Wills are filed with the Court and are public records. The beneficiaries named in the Will are given a copy of the Will. Other than individuals directly involved in an estate case (generally the Will’s beneficiaries and the estate attorney), it is rare for someone to go looking for a Will that has been filed.

• Probate provides a time limit for notified creditors to file a claim for payment if the Executor does not feel it is a legitimate debt of the deceased. The creditor then must file a claim in the estate case. A hearing may be requested if the Executor denies the claim. Then, a Judge will determine if the claim is legitimate and is to be paid from the estate after hearing and weighing the evidence presented.

• If the probate process is supervised, the Court will oversee the administration to some extent. The Executor must file an inventory of all the assets in which the deceased had an interest and of the debts owed by the deceased. The Executor must petition the Court and receive the authority to sell assets. Appraisals and valuations of assets may be necessary. The method of a sale may be determined by the Court as well. The Executor may be required to file certain reports during the administration and is required to make an accounting of all assets/funds that went into the estate and all cost/expenses that were paid from the estate as well as stating the distribution given to each beneficiary of the Will. A supervised estate administration can provide transparency for the beneficiaries of a Will. There are more attorney fees involved in a supervised estate administration.

• A Will may contain a Testamentary Trust, which is a Trust that is not funded (does not have any assets) until the death of the Testator. The Will provides for assets to be put in a Trust after the Testator’s death. This type of trust may be used for a beneficiary who is a child or who needs protection from creditors.

• A Will has no effect until the Testator’s death.

• Wills are typically less expensive to create than Trusts. Costs of administration are paid from the estate after the Testator’s death.

TRUSTS:

• A Trust avoids the Probate Process. A Trust transfers assets as soon as the Trustee can make it happen after the Grantor’s death.

• A Trust typically has terms to be carried out during the Grantor’s lifetime. The Grantor is the creator of the Trust. This may include payments to named persons or entities and other provisions, such as requiring assets to be sold, an accounting be done, and other administrative tasks for the Trustee.

• Trusts typically are not docketed with the Court, becoming as a public record. A trust may become a public record if there is a dispute. It is possible for an individual to obtain a copy of a Trust if they have standing or a meritorious reason. A Trust can be contested, and the administration of the Trust can also be challenged, which likely means a Court proceeding.

• The tax consequences are the same with both documents. There is no Indiana Inheritance Tax for estates probated in Indiana. The Federal Estate Tax does not apply on estates under 13.31 million for an individual. Not all assets are subject to federal estate tax, such as life insurance death benefits or jointly owned property passing to the surviving owner.

• Trusts require upkeep up during the Grantor’s lifetime. Refinancing, selling, trading, property that is titled in the Trust’s name can be more cumbersome. Assets must be transferred into the name of the Trust. If the Trust doesn’t own anything, it is of no value. Trusts operate during the Grantor’s lifetime and after the Grantor’s death.

• Trust typically cost more upfront & during the Grantor’s lifetime to create the Trust and to maintain the Trust, ensuring assets are transferred into the Trust. There are also administrative costs for Trusts.

• Certain Trusts may be created to protect assets. Examples are Spendthrift Trusts, Special Needs Trusts, and depending on the circumstances, Irrevocable Trusts.

• Transferring appreciating assets at death can be a better option than during a person’s lifetime due to Indiana’s “stepped-up” basis given to the asset which is transferred after a person’s death. This avoids Capital Gains Tax for the increase in value that occurred during the lifetime of the deceased.

IT IS IMPORTANT TO MEET WITH AN ATTORNEY FOR YOUR ESTATE PLANNING. LEGAL DOCUMENTS PULLED OFF THE INTERNET CAN BE COSTLY AND HAVE UNFORTUNATE RESULTS DUE TO NOT BEING PROPERLY DRAFTED OR THE SIGNING PROCESS NOT MEETING THE REQUIREMENTS OF INDIANA LAW. IT IS WISE AND COST EFFECTIVE TO HAVE THE DOCUMENTS DRAFTED AND SIGNED AT THE DIRECTION OF AN ATTORNEY SO THEY ARE DONE CORRECTLY.

Contact us today to schedule an Estate Planning Consult.

Pro Se is a Better Way

I have been a divorce attorney for more than 30 years. Before that, I worked in the office of a judge who primarily handled divorces. I've seen a lot over the years, some good and some bad.

Over the last several years, one positive force in family law has stuck out; the ever-increasing popularity of pro se mediation. We have seen a significant increase in mediation cases around Carmel, Fishers, and other Indianapolis suburbs.

Frankly, pro se is the best option for most divorcing couples. Most of the time, the two parties want the proceedings to be fair and painless. In this circumstance, pro se is the best choice - there is no need for legal representation during negotiations and certainly no need to litigate.

Professionally, I prefer the efficient, straightforward manner of pro se cases over the long, drawn-out process that lawyers can sometimes instigate.

Pro se mediation, or self-representation mediation, allows divorcing couples to work out their differences without requiring teams of expensive lawyers and time-consuming court battles. Here are some of the reasons why pro se mediation can be a successful option for many divorcing couples.

Cost

Pro se mediation is a less expensive option than going to court. With court costs and attorney fees, divorce proceedings can quickly become a financial burden. However, by engaging in pro se mediation, couples can save thousands of dollars and still reach a mutually satisfactory agreement.

Efficiency

Pro se mediation is a faster process than going to court. When couples take their divorce to court, they often face a backlog of cases and long wait times. Pro se mediation, on the other hand, allows couples to resolve their differences promptly. 

Collaboration

Thirdly, pro se mediation is a more collaborative process than going to court. In court, each spouse is represented by their own attorney, which can create an adversarial atmosphere. As a pro se mediator, it is my job to understand both parties and help derive a compromise that is agreed upon - not forced upon - by all.

This collaborative approach can lead to better outcomes and a more amicable divorce.

Control

Pro se mediation allows couples to maintain control over the outcome of their divorce. In court, a judge decides how to divide assets, determine child custody, and more. In pro se mediation, it is my duty to help the couple work together to create a plan that works for them. This allows them to control their future and avoid a one-size-fits-all solution.

It is true the pro se only works for some cases. Sometimes you need a lawyer! But over the years, I've learned that most of the time, the couple themselves are the only ingredient required to work out an agreement.

If you are separated or divorcing, please consider pro se mediation. If you have any questions, don't hesitate to contact us.

All About Pro Se Mediation

Don't be discouraged by the fancy name, Pro Se Mediation is just a legal term to say that two people come into the office and work together to devise a plan for their family.  Pro Se is a Latin term for "one's self." Pro Se Mediation refers to mediation sessions where each party doesn't have their own legal representative. There are many circumstances where this approach is superior to other options for clients around Indianapolis and the entire state of Indiana.

Pro Se Mediation is used to develop the terms of legal separations, dissolutions, or post-nuptial agreements. They can even be helpful for pre-nuptial agreements.

At Carmel Family Law, we find that Pro Se Mediations work best when the individuals have an idea of what they want to accomplish and can clearly articulate their wishes to the mediator. If the relationship between the parties is contentious, or there is a significant separation between each party's wishes, there may be better choices than Pro Se Mediation.

We like to turn to Pro Se Mediation whenever possible because it has many advantages over alternatives.

Pro Se Mediation's most significant advantage is that we can achieve a successful agreement at a much lower cost than other mediation techniques or litigation. Pro Se eliminates the cost of each party hiring their own attorney. It also saves time by removing the discovery process and court appearances - saving on hours of attorney fees, filing fees, and the investment of time to complete everything.

The actual mediations occur with the mediator and can be accomplished with both parties in a single room. In this configuration, the mediator sits down with the parties and mediates the conversation - striving to find common ground between both parties with everyone present.

It is also common for the parties to wish to be separated during the mediation. In this configuration, the parties will stay in separate rooms, and the mediator will move back and forth to find common ground.

Most mediations take place over several sessions. This allows the parties and the mediator to work through all the issues without feeling a time crunch. Spacing out the process allows the parties time to reflect and make decisions based on outcomes, not emotions.

Once the general parameters of the agreement are final, it is the mediator's responsibility to prepare all the documents and paperwork that the Court will require to finalize the process. The mediator will ensure that all the "I's" are dotted and the "T's" are crossed - according to the agreement reached by the parties.

If you have made it this far, you are likely wondering: Is Pro Se Mediation the right choice for you? Follow the guidelines below:

1. Do you have a good idea of what you want in your separation agreement or dissolution decree?

2. Would you prefer to reach an agreement without arguing, clashing, and name-calling?

3. Are you willing to let a mediator - not a court - find common ground between you and the other party in a productive manner?

If you answered yes to the questions above, Pro Se Mediation is worth considering. It is generally a more pleasant process and comes at a much lower cost - financially and emotionally.

Lastly, in circumstances where children are involved, Pro Se Mediation sets a standard for a successful co-parenting relationship because it relies on collaboration from the start.

If you are considering Pro Se Mediation, please don't hesitate to contact us directly. We'll cover all the options and help you pick a process best aligned with your specific situation.

Holiday Co-Parenting Tips

The holidays are rapidly approaching, which usually means a stressful time for families that have separated, divorced, or are in the process. Children have good memories of previous holidays, and many feel the loss of their family even more so during this time. 

How do you protect your children from all this stress?

• Remember that the holidays are for family. If you can be civil or friendly with the other parent, consider celebrating the holidays together. If that’s not possible, try establishing new traditions that the kids will remember and look forward to each year.

• Don’t speak ill of the other parent, and don’t allow your family to bad mouth the other parent either. Allow your child(ren) to express their love for the other parent.

• Be aware that your child(ren), and yourself, may have a wide range of feelings during the holidays. It’s ok to have these feelings. Talk about them and work through them together.

• SLOW DOWN! You’ll feel the need to have your child(ren) visit all their relatives while they’re with you during the holidays, but this may not always be feasible. Rushing around to accomplish this may lead to more stress on your children.

• Take care of yourself! Exercise, eat healthily, get sleep, enjoy time with friends… relax. Your child(ren) will reflect your mood; if you’re calm, they are calm.

• Make travel fun. If you are traveling for the holidays, bring along activities. Stay positive, laugh, and make good memories.

• Share the kid(s) – even when it’s “your time” with them. Let your child(ren) talk to or see the other parent if they ask. There is a good chance they will miss them, and not allowing them to talk/see the other parent will make them more upset.

• Communicate, coordinate and be flexible. Be sure to communicate with your co-parent about holiday schedule(s) early on. Be very specific on dates and times, and be prepared to make any necessary last-minute changes.

• Plan gifts. Talk to each other about what gifts you plan on getting the child(ren) so that you aren’t duplicating them. Avoid trying to “outdo” each other.

• Ask what your kid(s) want. Include your kid(s) on holiday plans. Ask them what they want to do and who they want to see. While this may not be a conventional way of doing things, it will show the kid(s) that their feelings also matter.

• Stop-Look-Listen. Stop yourself from reacting with anger. Take a deep breath and recognize your feelings. Look at all your options before responding. Choose the option that will produce the best outcome. Listen to yourself and choose a response that shows understanding and kindness.