Indiana Probate vs. Non-Probate Assets Explained

A comparison graphic of Indiana estate planning paths: The left side shows the formal probate process with a courthouse and gavel for assets like individual bank accounts and vehicles. The right side shows the non-probate path with a sunrise and trust documents, illustrating how assets like life insurance and living trusts bypass the probate court.

By: Justin Schuhmacher, Owner/Attorney [Probate]

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Indiana probate and estate planning laws are complex and subject to change. For advice specific to your situation, please consult with a qualified Indiana attorney.

Summary: Understanding the foundation of an Indiana estate plan requires mastering the distinction between probate assets controlled by a Will and non-probate assets that bypass the court via trusts or beneficiaries. In fact, many plans fail because a Will only governs property held in an individual’s name, leaving other assets to transfer based on outdated designations or joint ownership. Coordinating how your assets are titled with your legal documents is the only way to ensure your wishes are met and avoid the costly, public probate process.

Every successful estate plan in Indiana rests on one fundamental distinction: probate versus non-probate assets. Understanding this foundational legal concept—and how different documents control each type of asset—is critical to ensuring your estate plan actually works the way you intend.

The Core Legal Framework: Distinguishing Between Probate and Non-Probate Systems

When you pass away, Indiana law essentially divides your property into two distinct categories, each governed by entirely different rules and documents. This isn’t just a technical detail—it’s the foundational principle that determines whether your estate plan succeeds or fails.

Probate assets are controlled by your Will and pass through the Indiana court system. Non-probate assets bypass the courts entirely and are controlled by beneficiary designations, trust documents, or ownership arrangements. Many people mistakenly believe their Will controls everything they own. In reality, your Will only controls probate assets—often just a fraction of your total estate.

What Is Probate in Indiana?

Probate is the legal process where an Indiana court oversees the administration of a deceased person’s probate assets. The court validates the Will (if one exists), appoints a personal representative (sometimes called executor or executrix), ensures debts and taxes are paid, and supervises the distribution of assets to heirs. In Indiana, probate proceedings occur in the county where the decedent lived.

The process is public record, can be costly (including court fees, attorney fees, and personal representative fees), and usually takes several months and sometimes several years to complete. Understanding probate isn’t about fear-mongering—it’s about recognizing that this formal court process is sometimes necessary, sometimes avoidable, and always worth planning around.

Probate Assets: Controlled by Your Will

Probate assets are property owned solely in your individual name with no beneficiary designation, no joint owner with survivorship rights, and no trust ownership. Under Indiana law, these assets must pass through probate, and your Will is the legal document that directs how they should be distributed.

Common probate assets include:

  • Real estate titled in your name alone (unless transferred via TOD deed or held in trust)
  • Bank accounts without POD designations
  • Vehicles titled solely in your name
  • Personal property—furniture, jewelry, artwork, collectibles
  • Sole proprietorship business interests
  • Any asset titled in your individual name without beneficiary designation
  • Any asset where “estate” or “my estate” is listed as the beneficiary

Here’s the critical point and common misconception: having a Will doesn’t avoid probate—it provides instructions for the probate court to follow. Your Will is your voice in the probate process, directing the court how to distribute your probate assets. However, without a Will, Indiana’s intestacy laws determine who inherits, but the probate process still occurs.  The intestacy laws are the default rules which determine who your heirs are and what proportion of your estate they are legally entitled to, in the absence of a will or estate plan.

Non-Probate Assets: Controlled by Beneficiary Designations and Trusts

Non-probate assets bypass Indiana’s probate courts completely. These assets transfer directly according to beneficiary designations, ownership structures, or trust terms—and your Will has no control over them whatsoever.

This is where many estate plans fail. People spend time and money creating a Will, carefully specifying who should receive what, only to discover that most of their assets pass outside the Will through beneficiary designations or joint ownership they set up years ago and forgot about.

The Primary Non-Probate Mechanisms

1. Beneficiary Designations

Beneficiary designations are contractual arrangements that supersede your Will. When you name a beneficiary, you’re creating a legally binding instruction that transfers the asset directly to that person upon your death. Common examples include:

  • Retirement accounts (IRAs, 401(k)s, 403(b)s, pensions)
  • Life insurance policies
  • Payable-on-Death (POD) bank accounts (also called Totten trusts)
  • Transfer-on-Death (TOD) investment accounts
  • Transfer-on-Death Deeds for Indiana real estate
  • Note: if an asset has a beneficiary listed as “estate” or “my estate”, then the probate process is still required

The legal strength of beneficiary designations cannot be overstated. If your Will says your son should inherit everything, but your $500,000 IRA names your ex-spouse as beneficiary, your ex-spouse gets the IRA. The beneficiary designation wins every time. This is why keeping beneficiary designations current is absolutely critical to estate plan success.

2. Joint Ownership with Right of Survivorship

Property owned jointly with right of survivorship automatically passes to the surviving owner(s), completely bypassing probate and your Will. In Indiana, this includes:

  • Joint tenants with right of survivorship (JTWROS) for any property
  • Tenants by the entirety (available only to married couples in Indiana)
  • Joint bank accounts or investment accounts with survivorship rights
  • Joint tenants with right of survivorship (JTWROS) for any property
  • Tenants by the entirety (available only to married couples in Indiana)
  • Joint bank accounts or investment accounts with survivorship rights

In this case, when one owner dies, the surviving owner becomes the sole owner by operation of law—no probate required, no Will consulted.

3. Trusts

A trust is perhaps the most powerful and comprehensive non-probate tool available under Indiana law. Here’s how it works:

A stack of files representing how a trust is used as a non-probate tool.

You create a trust document and transfer ownership of your assets from your individual name to the trust’s name (a process called “funding” the trust). You typically serve as trustee during your lifetime, maintaining complete control. The trust document names successor trustees and beneficiaries who will receive the assets when you die.

Assets properly titled in your trust’s name become non-probate assets. Your trust document—not your Will—controls their distribution. The trust continues to operate after your death, with your successor trustee distributing assets according to your instructions without any court involvement.

A properly funded trust can hold virtually any asset: real estate, bank accounts, investment accounts (with the exception of retirement accounts, which cannot be owned by a trust), business interests, and personal property. This provides privacy (trust administration isn’t public record), efficiency (distributions can occur within weeks), and flexibility (trusts can include sophisticated provisions for asset protection, special needs planning, and multi-generational wealth transfer).

*Note that Trusts can also be listed as designated beneficiaries of nearly every type of asset.

The Critical Distinction for Plan Success

The success of your estate plan hinges on understanding which document controls which assets:

  • Your Will controls: Assets in your individual name only (probate assets)
  • Beneficiary designations can control: Retirement accounts, life insurance, POD/TOD accounts, TOD deeds
  • Your Trust controls: Any asset properly titled in the trust’s name
  • Joint ownership controls: Property held as joint tenants with rights of survivorship (JTWROS) or tenants by the entirety (for married couples only).

Many people create estate plans that fundamentally conflict with their asset ownership. They execute a carefully drafted Will or trust, then leave most assets titled in ways that completely bypass their plan. The result? The “estate plan” never actually takes effect.

Indiana’s Small Estate Alternative

For estates valued at $100,000 or less (this means the collective value of all assets held in the individual’s name that do not have designated beneficiaries), Indiana offers a small estate affidavit procedure. This allows heirs to collect probate assets without formal court proceedings, but it’s still a probate process—just simplified. Understanding the difference between probate and non-probate assets can help you avoid even this simplified procedure.

Common Planning Failures

The empty trust. Creating a beautiful trust document but failing to retitle assets in the trust’s name. The trust controls nothing, and probate might proceed as if no trust existed.

Forgotten beneficiary designations. Naming an ex-spouse on a life insurance policy years ago, failing to update after divorce, remarriage, or children’s births.

Will-trust conflicts. Having a Will that says one thing and a trust or beneficiary designations that say another, creating family conflict and confusion.

Misunderstanding joint ownership. Adding a child’s name to a bank account “for convenience” without realizing you’ve just made them the legal owner of those funds.

Building a Coordinated Plan

A successful Indiana estate plan requires coordination across all these mechanisms:

  • Inventory your assets and determine whether each is currently a probate or non-probate asset
  • Review all beneficiary designations on retirement accounts, insurance, and TOD/POD accounts
  • Decide whether a trust is appropriate for your situation—particularly if you own real estate, value privacy, or want to avoid probate
  • If you create a trust, fund it properly by retitling assets in the trust’s name
  • Execute a Will to serve as a backup for any assets that don’t make it into the trust (a “pour-over” Will)
  • Review and update regularly after major life events
The Bottom Line

Understanding the distinction between probate and non-probate assets isn’t academic—it’s the difference between an estate plan that works and one that fails. Your Will, your trust, and your beneficiary designations are not interchangeable documents. Each controls different assets under different rules.

The most sophisticated Will in the world is worthless if all your assets pass as non-probate property. Even the most carefully crafted trust does nothing if you never fund it. The most thoughtful beneficiary designation becomes a disaster if you forget to update it after life changes.

Success requires understanding these foundational legal concepts and ensuring your asset ownership aligns with your estate planning goals. That alignment—between how you own your assets and what your planning documents say—is what separates effective estate planning from expensive paperwork.

Again, this information is general in nature and Indiana laws change. Always consult with a qualified Indiana estate planning attorney before making decisions about your estate.