An Indiana living trust allows you to place your assets in trust during your life and have some control over them even after your death. A revocable living trust can be an important part of your estate planning.
Living trusts in Indiana
A living trust in Indiana is created by the settlor. He or she transfers assets so they are owned by the trust. A trustee is chosen to manage the trust, and often the settlor selects himself as trustee, with a successor trustee in place to take over after the settlor’s death. The trustee’s duty is to manage the assets for the benefit of the settlor during life. After the death of the settlor, the trustee distributes assets to the beneficiaries that are named in the trust. A revocable trust can be changed or canceled at any time during life. An irrevocable living trust is permanent from the date of signing.
For a trust to be valid in Indiana, the settlor must live in the state or have property there; or the trustee must live in the state or do business there.
When you create a living trust in Indiana, the assets owned by the trust do not go through probate after your death. Indiana does not utilize the Uniform Probate Code, so its procedures can be complex. Probate takes many months and involves the costs of a personal representative and an attorney. There is a simple probate process for estates valued at less than $50,000, but most people who own a home will exceed that amount and be subject to full probate.
Do I need a living trust in Indiana?
Living trusts are an option to consider when planning your estate. A living trust Indiana is a private contract that is not filed with a court or made part of the public record. This is often considered one of the most important benefits of a trust. The assets in the trust, terms of the trust, and beneficiaries remain secret.
Another benefit of a living trust is the control it offers over your assets. When you place your assets in the trust, you are able to use and control them as you normally would. You live in your house, use your car, and spend your money as you wish without restriction. After your death, the trust gives you control over the assets, allowing you to decide exactly when and how your beneficiaries will receive their distributions. If you passed your assets with a will, they would be distributed immediately upon probate. In addition, a trust is more difficult to contest than a will.
A revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary for you to have your financial life managed for your benefit.
Living trusts and estate taxes in Indiana
A living trust is not generally a vehicle you can use to avoid estate taxes. Indiana has no estate tax, however the federal estate tax applies. There is an exemption of $5 million but anything over that amount is taxable. Special types of trusts called AB trust, marital trusts, or QTIP trusts can be used to pass assets from a spouse to the surviving spouse, avoiding tax. Your living trust will not shield your assets from Medicaid.
How to create a living trust in Indiana
Creating a living trust in Indiana is simple. There is no specific form required and your trust document must simply be clear in its terms. You sign the document in front of a notary and then fund the trust by placing ownership of assets in its name.
A living trust provides many benefits that can be very appealing. Creating a trust can provide you with the control and flexibility that is important to you.
If you are ready to create a living trust in Indiana, LegalZoom can help. The process is simple and begins with a questionnaire. We review your answers and send your living trust package to you by mail.