Good morning, folks. It’s Andy Stautz with Stautz Law, and I am back for another talk about Indiana probate and estate planning. Today, we’re talking about personal representative privileges. Really, personal representatives’ lack of privileges.
Background: What Does the P.R. Do?
So, a little bit of background. The personal representative is the person in a probate estate who is in charge of running the show, right? This is a synonym of executor, if you’ve heard of that. Okay, so the personal representative is appointed by the court in both a supervised and an unsupervised estate. And they’re given these letters, letters testamentary, letters of administration, depending on the case, that gives the person legal authority to go gather up the decedent’s property, you know, set it aside in this separate estate account, manage the accounts, you know, settle claims, all of this.
The Personal Representative Doesn’t Get a Bigger Share
The biggest single issue I run into with choice of personal representative or with heirs, heirship situations, you know, is when heirs are suspicious, like, does the personal representative get extra, right? Like, should we fight to be the personal representative because it’s like a privileged position?
And the answer very generally is no. Okay, the personal representative doesn’t get an extra share of the estate. So if there are, let’s say it’s an intestate estate, there’s no will, there’s just three adult children. Okay, the three adult children are going to get equal thirds, and the child who decides to be the personal representative doesn’t get half all of a sudden, okay, they still get equal thirds.
So the choice of personal representative does not affect the basic distribution scheme.
The choice of personal representative does not affect the basic distribution scheme.
Personal Representative Fees are Not a Windfall
That said, the personal representative is allowed to take a fee, basically like an hourly rate for his or her work doing the personal representative duties, right? Because It’s a lot of paperwork. It’s a lot of administrative time. You know, you got to deal with, me, the lawyer, whatever. You got to be on the phone with a lawyer all the time. So it is work. It’s a job. And the personal representative is allowed to take a reasonable fee for that work. In general, though, and personal representatives’ fees are a big topic, I suppose, but In general, it should be indifferent, right? It should be, the fee should be just enough to compensate for the work so that anybody would take it or leave it, right? It needs to be about, it needs to be about like that. So it shouldn’t be like this big bonus to the personal representative. So that’s where, when I say it doesn’t change the distribution to be a personal representative, And yes, you get a fee, but the fee is just to make up for the work, and it is a lot of work.
The Personal Representative Job is Not Worth a Fight
So there you have it. So the basic, I guess the point of recording this talk is to say, most of the time, for most people, You don’t need, siblings don’t need to fight about who’s going to be the personal representative, or heirs don’t need to fight about it.
Because, you know, for someone who isn’t the personal representative, you can pretty much just sit back, keep an eye on things, but just wait for your distribution at the end. You know, review the accountings and such to make sure it’s going right, but it’s easier not to be the personal representative, right?
And that presumes that the personal representative who does serve is a diligent, responsible person. So, if you’ve got your pick, you want, you want the most like business-like, check the box, diligent child. We’ve talked about this in other talks, right? You don’t want someone debilitated by grief. You also don’t want someone who has no fixed address. But, you know, as long as the personal representative is suited to the job, And as long as the, estate counsel, the probate lawyer is, honest and upstanding and trustworthy, (me) it’s easier not to be the personal representative. Being the personal representative is an important job. You got to do it right. But it’s work and it shouldn’t be like there are no, there are not such special privileges that it should be like a prize to be fought for.
Conclusion
Okay. So I suppose that was a basic overview, but the key question is, does the personal representative get an extra share? No. Do they get a reasonable fee for their work? Yes, but I think you’d have to be pretty silly to take on the job just for the fee, right?
Most people do it because they want to honor the decedent and make sure their affairs are taken care of diligently and fairly.
That’s all I’ve got for today. Thanks for listening. And if you’ve got any questions, you’re probably on my website. Give me a call, give me an e-mail. I’d love to talk more about your specific situation.
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Hi folks, it’s Andy Stautz at Stautz Law. I am back today for another talk about estate administration (in this case). We are talking about houses and their effect on estate income taxes. This is timely because it is tax season when I’m recording this, which is mid-February.
So one thing we’ll discuss if you do a probate administration with me (and just as a background talk about Indiana law for anyone who’s interested), a house is a common item of estate property. A lot of the times we’re opening a probate estate specifically because there’s a house to deal with, to be sold.
Estate Income Tax
Also, estates, just like people, owe income taxes. [The return form for estate income taxes is IRS Form 1041.] So if an estate has income, it has to pay taxes on that income. This is separate from the federal estate tax. Okay, this is like, this is an income tax.
And so at this time of year, I’m advising probate clients and, you know, saying, okay, well, what do we do about estate income taxes? And if you had a house in the estate and you’ve sold it, It’s like, okay, well, what are the tax consequences of that?
Common Scenario: No Income on House Sale
And the basic answer is, oftentimes it’s a wash. Because, as we’ve talked about in a previous video, probate assets get a step up in basis. So that means when the estate gets the house, the person dies, the house goes from that person to their estate, the house comes into the estate with a basis of whatever the date of death value was. Therefore, if you sell the house a couple months later as part of an estate administration, you basically have a 0 gain.
Let’s say a person dies with a house, it’s worth $200,000, you sell it a month later for $200,000, You’ve got a $200,000 basis and a $200,000 sale price and 0 capital gains and 0 income, which is nice.
So oftentimes I’m able to say, don’t worry about it. That’s kind of the point of this talk is you need to think, you know, when you’re doing an estate administration, you need to make sure that you’re keeping up with taxes. It’s part of the personal representative’s duty.
Conclusion: General Information vs. Specific Advice
This is something if you’ve got an estate with me, we’ll definitely be talking about. But as a general informational talk about Indiana law, it’s okay, keep that in mind. Think about how your estate as an entity generates income or doesn’t on its own and make sure you pay the taxes that are owed because that’s part of the duty. So just a quick talk, quick note about that one. I’m not primarily a tax advisor. But this is just a little item of law that comes up over and over and was worth a general overview. If you need specific advice, you need to talk to me specifically, you need to talk to me and not just depend on informational videos. If you need legal advice, you’re on my website. Give me a call, give me an e-mail and we’ll talk about, you know, you in particular.
Hope you enjoyed it. Thanks and bye.
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Good morning. It’s Andy Stautz at Stautz Law, and I am back today for another talk about a probate and estate administration topic. Today’s topic is the estate bank account.
When Do You Need an Estate Bank Account?
Now, this is one of the things that a personal representative, (also called an executor, if you’re more familiar with that term), needs to do right at the beginning of an estate administration. So, you know, you petition the court to open an estate for the person who’s died. If the court approves that petition, they’ll grant it, they’ll issue the letters of administration, congratulations, now you’ve got a personal representative with an open estate, and the personal representative has these letters of administration. And that means it’s time to gather estate property.
Well, where do you put it once you have it?
And the answer is you have an estate bank account, which is separate from the personal representative’s personal accounts and separate from the decedent’s bank accounts, right?
The Estate as a Separate Entity
This bank account is going to be just for the estate itself, which is like a separate entity. It’s like its own company for the duration of the estate administration. So you need a separate account so that you can keep track of what comes in and what goes out and so that the accounting can be separate so that you can show to the other beneficiaries, to the court if necessary, how the personal representative has handled the estate property.
I always give my personal representative clients an instruction sheet to take to the bank when they go to open this estate bank account. And probably the most important two items are, one, it’s a separate account. I keep harping on this, but that’s because it matters.
EINs for Estates
We want an account that’s just for the estate. And to do that, the estate needs an identity, right? It’s not the personal representative, it’s not the decedent, so you have to get your own ID number. And that is an employer identification number, an EIN, which is obviously usually for companies, usually for businesses, but it’s the same type of ID number that the IRS federal tax authority uses for estates. So the personal representative has to go apply for an EIN for the estate, and then they’ll take that EIN to the bank to show that the estate is a separate entity that can have its own account.
So I provide instructions to my clients on how to request an EIN. It’s really easy and it’s online these days. Sometimes I apply for an EIN for the estate on the personal representative’s behalf, but you need a separate authorization sheet, right? Not just anyone can go around willy-nilly applying for other people for these tax IDs.
Conclusion: Putting It All Together
But that’s kind of the process: Right at the start, your estate, you’re spinning it up, you’re kind of starting administration. You need a place to put the estate property as you gather it, so the personal representative gets an EIN, goes to the bank, opens an estate bank account, and then that lasts for the duration of the administration.
And like I said, I give all my clients an instruction sheet on this because, you know, it’s kind of the first item of business.
So that’s all I’ve got for today on this topic. I think I’ll probably talk more about accountings and inventories later. This was just kind of a what you need to know about this particular step in Indiana state administration. So you’re on my website, obviously. The end card will have my contact information. Give me a call or e-mail me if you’ve got questions about this or you want to work with me on this or any other matter. Hope this informational talk’s been useful and bye for now.
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Hi folks, it’s Andy Stautz at Stautz Law. I’m back with another talk. I’m recording this one just after the one I did before on personal representative bonds. Today’s a very closely related topic, and that’s Notices of Administration. And these are things that go together right at the start of a probate estate.
What is a Notice of Administration?
So you petition the court, you say “please, we need to open an estate to administer, you know, the decedent’s affairs.” You make that petition. The court will order the appointment of a personal representative (that’s going to be the person in charge) and then once the court is satisfied and you’ve posted a bond if you need one (see the other video), the Court will issue letters of administration or letters testamentary, which is the document that gives the personal representative powers to act. And the Court will also issue some “notices of administration.”
That’s what we’re talking about today.
And these [notices of administration] come in two flavors.
There is a published notice of administration that just goes to the entire world. It’s basically, you know. People we don’t know about. Anyone who’s interested can see this.
There’s another notice of administration that goes to distributees – beneficiaries – known creditors. So that’s kind of the people we do know about.
Why Do You Have to Publish the Notice of Administration?
And both notices. Have the same content, they basically say. OK, this court, you know, whatever court it is, Marion County, has opened administration of the decedent’s estate, case number. Blah blah blah.
And it warns whoever receives the notice, you know, here’s how the estate administration’s going to go. And if you have any claims against the estate, you need to bring them in the statutory time period. So if you want the person to pay debts, you’ve got to let us know now so that the personal representative can deal with it and allow or disallow the claims.
(We’ll talk about how creditor claims are handled later) but the purpose of the notice of administration to distributees is saying, “hey, people we know about, this is what we’re doing,” and the published version is, “hey, people we don’t know about, here’s what we’re doing.”
How Does Publication Work? Who Sees It?
The published version gets published in a newspaper, usually. So like at the back of the Indiana Business Journal, right, the “court and commercial record” is what it’s called here in Marion County. Johnson County’s got its own business paper. At the back there are all these, like, little paragraphs. And that’s exactly what these notices of administration are, they say: this court, this case, here are the dates.
And you might say, wait a minute. I’ve never looked at those. Who looks at those?
And the answer is well, creditors do! Right? people, people have a job to, you know, look through it and say, aha that’s one of our utility customers or that’s one of my credit card customers. And so they will. They will see it. You won’t see it because you know you don’t care about estate administrations, but creditors do monitor it.
So that’s just one more step in starting administration. Your attorney, me if I’m your attorney, will take the notice that’s issued by the court and go to the correct newspaper and say “publish this please.” And pay the fee, which is reimbursable from the estate and it’s an expense of administration.
And the newspaper will say, great, we got it. We’re going to publish it. And then later, after it’s been published, you get a proof of publication. You take that to the court and you say “look, Court, we did publish it just like we were supposed to.”
So that’s about all on the publication side.
Notice of Administration to Known Creditors
The other people the notice goes to is “known creditors.” T e personal representative is supposed to look through the decedent’s affairs and say, OK, well, you know he didn’t pay his last utility bill. We got some hospital bills. You know, maybe we got some credit card.
So you need to make a list of those, and you send the notice directly to those creditors. You say, “OK guys, you know, we think that the decedent might have owed you money. You know, here’s your chance to speak up and say something.”
And it doesn’t even have to be… It doesn’t say certified mail or return receipt. It’s just, you know, send it. And that’s your obligation. And then after that, you’re supposed to report to the court and say “by the way, we notified these creditors.”
So that’s how that works. Notices are just to get the word out so that anybody who has claims can come forward because you kind of want to get everything out into the open so you can deal with it at once.
If you got any questions about that, you can always call me. Like I said, I handle lots of Indiana probates. I’d be happy to help you through yours. Thanks and bye for now.
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Hi folks, it’s Andy Stautz at Stautz Law. I’m back with another talk about probate. Today’s topic is personal representative bonds. So as you may know, in Indiana we call the person who administers a decedent’s estate the “personal representative.” That’s like an “executor,” same thing, just a modern name for it.
And some counties in Indiana will require a personal representative to post a bond.
What is a Personal Representative Bond?
Basically, the bond is a security that is held to ensure that the personal representative carries out his or her duties. So, you know, gathers the estate property correctly, distributes it to the right people. You know, just another type of surety bond.
History of Personal Representative Bonds in Indianapolis Probate
And the county that does this the most is Marion County, Indiana, so Indianapolis, and this probate court here is the most likely to require a personal representative to post a bond.
And if you want a little bit of history, that goes way back, it’s been a reputation of this court for about 50 years. And back in the day, the Rules Committee was talking about “OK, well, we want to require bonds” and someone said, “well, how much bond does $100 buy?” And the answer is about $17,000. So that’s why you’ll often see the Marion County probate court ordering a $17,000 bond — because that was kind of the minimum. (I just applied for one of these the other day for one of my personal representative clients and now it’s $122 with the surety company I use.)
So if you’re wondering about that, that’s kind of where that came from.
What to Do when the Court Orders a Personal Representative Bond
Now, you can get a bond from all sorts of places. You know. I’ve got my insurance company and you know it’ll be called a “casualty and insurance” company or a “surety [company].” You know, I’ve got an insurance company I work with to apply for those bonds. So it’s fairly routine.
If you get an order from the probate court requiring that you post a bond before letters are issued, don’t worry about it, it happens, and it’s just one more step in the probate process.
[By the way,] that is where the court will order the bond. It’ll be, you know… you’ll petition to be appointed personal representative. And then the Court’s order will say “this petition is granted.” And you know, “letters will issue… letters of administration, letters testamentary will issue once you post a bond of ________.” Whatever amount.
How to Prevent Having to Get a Bond
Can you avoid having to post a bond?
That’s a question I get, and the answer is yes. Sometimes.
The best thing you can do is have a will that says. “I authorize my personal representative to serve without bond.” So that’s a clause on the estate planning side ahead of time that I like to put in wills for my clients, because it makes life easier… because the court is more likely to look at that and say. “OK, great. No bond? no bond.”
You can also try in your initial petition to say “we request that the Court orders administration without bond.” And a lot of this, as I said, varies by county. So Marion County, Indiana. You’re more likely to be ordered to post a bond. Down in Johnson County, you’re more likely to get away without it.
Having authorization in the will is best. Having consents from all the beneficiaries or all the intestate heirs is second best. And then from there it kind of depends.
[It depends] on the court. And you know, one factor in the amount of bond is going to be how big and complex the estate is and whether it’s supervised or not and whether there’s a risk of conflict. So if there’s a big complicated supervised estate, you’re more likely to have the court order some bond, even a big bond, versus if it’s unsupervised, you know, fewer beneficiaries, no conflict, you’re more likely to have no bond or minimum bond. So that kind of is what goes into that.
But like I said, you know, $122 dollars was my most recent minimum bond. It’s an easy process, just one more step to go through. Your attorney will help you with that. I can help you with that if you’re one of my clients.
Who Pays for a Surety Bond?
And that’s an expense chargeable to the estate, so you know, I usually front that cost and it’s billed to the estate, or you could pay for it right away and it gets reimbursed later. Just another expense of administration, we like to avoid it when we can, but if it’s been ordered, it’s no big deal. Give me a call if you want to talk about this or any other issues. I do these things all the time. Especially here in Marion County. So look forward to hearing from you. That’s all for today. Thanks. Bye.
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Many people assume that if they want their assets to go to their children, they don’t need a will—especially since Indiana’s intestacy law already provides for children when a parent passes away. While that’s technically true, having a will can significantly simplify estate administration, provide additional protections, and make life easier for your family.
A Will Helps Streamline the Process
Even if intestacy law distributes your estate to your children, the probate process can be more complicated without a will. Here’s why:
Naming a Personal Representative – A will allows you to choose the person responsible for handling your estate. In Indiana, that person is called your “personal representative.” (If you’ve heard of an “executor,” it’s a different name for the same thing.) Without a will, a court must appoint someone, which can lead to family disputes or an administrator you wouldn’t have chosen.
Avoiding Delays and Extra Costs – A well-drafted will can allow for informal probate, which is quicker and less expensive. Without a will, probate may take longer and require additional legal fees.
Providing Management for Minor Children – If your children are under 18, they cannot inherit directly. A will allows you to create a trust for their benefit, ensuring responsible management of their inheritance.
Clarifying Specific Wishes – Do you want your children to receive equal shares? Do you want a particular asset (like a house) to go to one child while another gets a different asset? A will lets you customize your plan, rather than relying on the state’s formula.
A Will Gives Your Executor More Flexibility
A properly drafted will can also grant important powers to the executor (personal representative), such as:
Selling property without court approval
Managing assets more efficiently
Resolving estate matters without unnecessary delays
Without these powers, your executor may have to go through extra court proceedings, adding stress and cost to the process.
More Than Just a Will: A Comprehensive Estate Plan
A basic will is an important first step, but a comprehensive estate plan includes more than just instructions for distributing property. At Stautz Law, our basic estate planning package includes:
✅ A Will – Ensuring your wishes are followed and streamlining probate. ✅ A Healthcare Advance Directive – Appointing a trusted decision-maker for medical care. ✅ A Durable Power of Attorney – Naming someone to handle financial matters if you become incapacitated. ✅ A Plan for Minor Children – Ensuring a trusted guardian is legally designated.
These essential documents work together to provide complete peace of mind for you and your family.
Take the Next Step
If you’re considering estate planning, even for a simple situation, a will makes everything easier for your loved ones. Contact Stautz Law today to discuss your options and ensure your estate is in order.