Bill Text: IN SB0169 | 2011 | Regular Session | Enrolled
Bill Title: Probate, trusts, and transfer on death transfers.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2011-05-18 - SECTIONS 6 through 16 effective 04/20/2011 [SB0169 Detail]
Download: Indiana-2011-SB0169-Enrolled.html
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or
AN ACT to amend the Indiana Code concerning trusts and fiduciaries.
(b) Subject to subsection (e), an interest in a vehicle transferred under this section vests upon the death of the
(c) A certificate of title that is:
(1) worded in substance as "A.B. transfers on death to C.D." or "A.B. and C.D. transfer on death to E.F."; and
(2) signed by the
is a good and sufficient conveyance on the death of the
(d) A certificate of title obtained under this section is not required to be:
(1) supported by consideration; or
(2) delivered to the named transfer on death beneficiary or beneficiaries;
to be effective.
(e) Upon the death of
(1) The beneficiary:
(A) is named in the certificate; and
(B) survives the transferor.
(2) The beneficiary:
(A) survives the transferor; and
(B) is entitled to an interest in the vehicle under IC 32-17-14-22 following the death of a beneficiary who:
(i) is named in the certificate; and
(ii) did not survive the transferor.
(f) A transfer of an interest in a vehicle under this section is subject to IC 6-4.1.
(g) A certificate of title designating a transfer on death beneficiary is not testamentary.
(h) In general, IC 32-17-14 applies to a certificate of title designating a transfer on death beneficiary. However, a particular provision of IC 32-17-14 does not apply if it is inconsistent with the requirements of this section or IC 9-17-2-2(b).
(b) Subject to subsection (e), an interest in a watercraft transferred under this section vests upon the death of the
(c) A certificate of title that is:
(1) worded in substance as "A.B. transfers on death to C.D." or "A.B. and C.D. transfer on death to E.F."; and
(2) signed by the
is a good and sufficient conveyance on the death of the
(d) A certificate of title obtained under this section is not required to be:
(1) supported by consideration; or
(2) delivered to the named transfer on death beneficiary or beneficiaries;
to be effective.
(e) Upon the death of
(1) The beneficiary:
(A) is named in the certificate; and
(B) survives the transferor.
(2) The beneficiary:
(A) survives the transferor; and
(B) is entitled to an interest in the watercraft under IC 32-17-14-22 following the death of a beneficiary who:
(i) is named in the certificate; and
(ii) did not survive the transferor.
(f) A transfer of an interest in a watercraft under this section is subject to IC 6-4.1.
(g) A certificate of title designating a transfer on death beneficiary is not testamentary.
(h) In general, IC 32-17-14 applies to a certificate of title designating a transfer on death beneficiary. However, a particular provision of IC 32-17-14 does not apply if it is inconsistent with the requirements of this section or IC 9-31-2-16.
(a) Any estate, right, or interest in land or other things acquired by the testator after the making of the testator's will shall pass as if title was vested in the testator at the time of making of the will.
(b) All devises of real estate shall pass the whole estate of the testator in the premises devised, although there are no words of inheritance or of perpetuity, whether or not at the time of the execution of the will the decedent was the owner of that particular interest in the real estate devised. Such devise shall also pass any interest which the testator may have at the time of the testator's death as vendor under a contract for the sale of such real estate.
(c) A devise of real or personal estate, whether directly or in trust, to the testator's or another designated person's "heirs", "next of kin",
"relatives", or "family", or to "the persons thereunto entitled under the
intestate laws" or to persons described by words of similar import, shall
mean those persons (including the spouse) who would take under the
intestate laws if the testator or other designated person were to die
intestate at the time when such class is to be ascertained, domiciled in
this state, and owning the estate so devised. With respect to a devise
which does not take effect at the testator's death, the time when such
class is to be ascertained shall be the time when the devise is to take
effect in enjoyment.
(d) In construing a will making a devise to a person or persons
described by relationship to the testator or to another, any person
adopted prior to the person's twenty-first birthday before the death of
the testator shall be considered the child of the adopting parent or
parents and not the child of the natural or previous adopting parents.
However, if a natural parent or previous adopting parent marries the
adopting parent before the testator's death, the adopted person shall
also be considered the child of such natural or previous adopting
parent. Any person adopted after the person's twenty-first birthday by
the testator shall be considered the child of the testator, but no other
person shall be entitled to establish relationship to the testator through
such child.
(e) In construing a will making a devise to a person described by
relationship to the testator or to another, a person born out of wedlock
shall be considered the child of the child's mother, and also of the
child's father, if, but only if, the child's right to inherit from the child's
father is, or has been, established in the manner provided in
IC 29-1-2-7.
(f) A will shall not operate as the exercise of a power of
appointment which the testator may have with respect to any real or
personal estate, unless by its terms the will specifically indicates that
the testator intended to exercise the power.
(g) If a devise of real or personal property, not included in the
residuary clause of the will, is void, is revoked, or lapses, it shall
become a part of the residue, and shall pass to the residuary devisee.
Whenever any estate, real or personal, shall be devised to any
descendant of the testator, and such devisee shall die during the
lifetime of the testator, whether before or after the execution of the will,
leaving a descendant who shall survive such testator, such devise shall
not lapse, but the property so devised shall vest in the surviving
descendant of the devisee as if such devisee had survived the testator
and died intestate. The word "descendant", as used in this section,
includes children adopted during minority by the testator and by the
testator's descendants and includes descendants of such adopted
children. "Descendant" also includes children of the mother who are
born out of wedlock, and children of the father who are born out of
wedlock, if, but only if, such child's right to inherit from such father is,
or has been, established in the manner provided in IC 29-1-2-7. This
rule applies where the parent is a descendant of the testator as well as
where the parent is the testator. Descendants of such children shall also
be included.
(h) Except as provided in subsection (m), if a testator in the
testator's will refers to a writing of any kind, such writing, whether
subsequently amended or revoked, as it existed at the time of execution
of the will, shall be given the same effect as if set forth at length in the
will, if such writing is clearly identified in the will and is in existence
both at the time of the execution of the will and at the testator's death.
(i) If a testator devises real or personal property upon such terms
that the testator's intentions with respect to such devise can be
determined at the testator's death only by reference to a fact or an event
independent of the will, such devise shall be valid and effective if the
testator's intention can be clearly ascertained by taking into
consideration such fact or event even though occurring after the
execution of the will.
(j) If a testator devises or bequeaths property to be added to a trust
or trust fund which is clearly identified in the testator's will and which
trust is in existence at the time of the death of the testator, such devise
or bequest shall be valid and effective. Unless the will provides
otherwise, the property so devised or bequeathed shall be subject to the
terms and provisions of the instrument or instruments creating or
governing the trust or trust fund, including any amendments or
modifications in writing made at any time before or after the execution
of the will and before or after the death of the testator.
(k) If a testator devises securities in a will and the testator then
owned securities that meet the description in the will, the devise
includes additional securities owned by the testator at death to the
extent the additional securities were acquired by the testator after the
will was executed as a result of the testator's ownership of the
described securities and are securities of any of the following types:
(1) Securities of the same organization acquired because of an
action initiated by the organization or any successor, related, or
acquiring organization, excluding any security acquired by
exercise of purchase options.
(2) Securities of another organization acquired as a result of a
merger, consolidation, reorganization, or other distribution by the
organization or any successor, related, or acquiring organization.
(3) Securities of the same organization acquired as a result of a
plan of reinvestment.
Distributions in cash before death with respect to a described security
are not part of the devise.
(l) For purposes of this subsection, "incapacitated principal" means
a principal who is an incapacitated person. An adjudication of
incapacity before death is not necessary. The acts of an agent within the
authority of a durable power of attorney are presumed to be for an
incapacitated principal. If:
(1) specifically devised property is sold or mortgaged by; or
(2) a condemnation award, insurance proceeds, or recovery for
injury to specifically devised property are paid to;
a guardian or an agent acting within the authority of a durable power
of attorney for an incapacitated principal, the specific devisee has the
right to a general pecuniary devise equal to the net sale price, the
amount of the unpaid loan, the condemnation award, the insurance
proceeds, or the recovery.
(m) A written statement or list that:
(1) complies with this subsection; and
(2) is referred to in a will;
may be used to dispose of items of tangible personal property, other
than property used in a trade or business, not otherwise specifically
disposed of by the will. To be admissible under this subsection as
evidence of the intended disposition, the writing must be signed by the
testator and must describe the items and the beneficiaries with
reasonable certainty. The writing may be prepared before or after the
execution of the will. The writing may be altered by the testator after
the writing is prepared. The writing may have no significance apart
from the writing's effect on the dispositions made by the will. If more
than one (1) otherwise effective writing exists, then, to the extent of a
conflict among the writings, the provisions of the most recent writing
revoke the inconsistent provisions of each earlier writing.
(n) A will of a decedent who dies after December 31, 2009, and
before January 1, 2011, that contains a formula referring to:
(1) the unified credit;
(2) the estate tax exemption;
(3) the applicable credit amount;
(4) the applicable exclusion amount;
(5) the generation-skipping transfer tax exemption;
(6) the GST exemption;
(7) the marital deduction;
(8) the maximum marital deduction;
(9) the unlimited marital deduction;
(10) the inclusion ratio;
(11) the applicable fraction;
(12) any section of the Internal Revenue Code:
(A) relating to the:
(i) federal estate tax; or
(ii) generation-skipping transfer tax; and
(B) that measures a share of:
(i) an estate; or
(ii) a trust;
based on the amount that can pass free of federal estate taxes or the amount that can pass free of federal generation-skipping transfer tax law; or
(13) a provision of federal estate tax or generation-skipping transfer tax law that is similar to subdivisions (1) through (12);
refers to the federal estate tax and generation-skipping transfer tax laws as they applied with respect to estates of decedents on December 31, 2009.
(o) Subsection (n) does not apply to a will:
(1) that is executed or amended after December 31, 2009; or
(2) that manifests an intent that a contrary rule apply if the decedent dies on a date on which there is no then applicable federal estate or generation-skipping transfer tax.
(p) If the federal estate or generation-skipping transfer tax becomes effective before January 1, 2011, the reference to January 1, 2011, in subsection (n) shall refer instead to the first date on which the tax becomes legally effective.
(q) Within three (3) months following the latest to occur of the:
(1) decedent's death;
(2) fiduciary's appointment; or
(3) enactment of this subsection;
the personal representative under a will to which subsection (n) applies shall give written notice
(r) The personal representative
December 31, 2009. A proceeding under this subsection must be
commenced within nine (9) months after the death of the testator or
grantor.
(1) before the court decrees final distribution of the estate; or
(2) in an unsupervised estate, before a closing statement has been filed.
(b) No real estate situate in Indiana of which any person may die seized shall be sold by the executor or administrator of the deceased person's estate to pay any debt or obligation of the deceased person, which is not a lien of record in the county in which the real estate is situate, or to pay any costs of administration of any decedent's estate, unless letters testamentary or of administration upon the decedent's estate are taken out within five (5) months after the decedent's death.
(c) The title of any real estate or interest therein purchased in good faith and for a valuable consideration from the heirs of any person who died seized of the real estate shall not be affected or impaired by any devise made by the person of the real estate so purchased, unless:
(1) the will containing the devise has been probated and recorded in the office of the clerk of the court having jurisdiction within five (5) months after the death of the testator; or
(2) an action to contest the will's validity is commenced within the time provided by law and, as a result, the will is ultimately probated.
(d) Except as provided in subsection (e), the will of the decedent shall not be admitted to probate unless the will is presented for probate before the latest of the following dates:
(1) Three (3) years after the individual's death.
(2) Sixty (60) days after the entry of an order denying the probate of a will of the decedent previously offered for probate and objected to under section 16 of this chapter.
(3) Sixty (60) days after entry of an order revoking probate of a will of the decedent previously admitted to probate and contested under section 17 of this chapter.
However, in the case of an individual presumed dead under IC 29-2-5-1, the three (3) year period commences with the date the individual's death has been established by appropriate legal action.
(e) This subsection applies with respect to the will of an individual who dies after June 30, 2011. If:
(1) no estate proceedings have been commenced for a decedent; and
(2) an asset of the decedent remains titled or registered in the name of the decedent;
the will of the decedent may be presented to the court for probate and admitted to probate at any time after the expiration of the deadline determined under subsection (d) for the sole purpose of transferring the asset described in subdivision (2). A will presented for probate under this subsection is subject to all rules governing the admission of wills to probate.
(1) A discretionary interest is a mere expectancy that is neither a property interest nor an enforceable right.
(2) A creditor may not:
(A) require a trustee to exercise the trustee's discretion to make a distribution; or
(B) cause a court to foreclose a discretionary interest.
(3) A court may review a trustee's distribution discretion only if the trustee acts dishonestly or with an improper motive.
(b) Words such as sole, absolute, uncontrolled, or unfettered discretion dispense with the trustee acting reasonably.
(c) Absent express language to the contrary, if the distribution language in a discretionary interest permits unequal distributions
between beneficiaries or distributions to the exclusion of other
beneficiaries, a trustee may, in the trustee's discretion, distribute all of
the accumulated, accrued, or undistributed income and principal to one
(1) beneficiary to the exclusion of the other beneficiaries.
(d) Regardless of whether a beneficiary has any outstanding
creditors, a trustee of a discretionary interest may directly pay any
expense on behalf of the beneficiary and may exhaust the income and
principal of the trust for the benefit of the beneficiary. A trustee is not
liable to a creditor for paying the expenses of a beneficiary who holds
a discretionary interest.
(b) A discretionary interest may be evidenced by permissive language such as "may make distributions" or may be evidenced by mandatory distribution language that is negated by the discretionary language of the trust such as "the trustee shall make distributions in the trustee's sole and absolute discretion".
(c) An interest that includes distribution language that appears mandatory but is subsequently qualified by discretionary distribution language is considered a discretionary interest.
(d) Trust provisions that create discretionary interests include the following examples:
(1) "The trustee may, in the trustee's sole and absolute discretion, make distributions for health, education, maintenance, and support.".
(2) "The trustee shall, in the trustee's sole and absolute discretion, make distributions for health, education, maintenance, and support.".
(3) "The trustee may make distributions for health, education, maintenance, and support.".
(4) "The trustee shall make distributions for health, education, maintenance, and support. The trustee may exclude any beneficiary or make unequal distributions among the beneficiaries.".
(5) "The trustee may make distributions for health, education, maintenance, support, comfort, and general welfare.".
PASSAGE]: Sec. 35. (a) This section is intended to ensure that if
real property is transferred to one (1) or more revocable trusts
created by a husband and wife for estate planning purposes, the
husband and wife will enjoy the real estate ownership protections
that they would otherwise enjoy if they owned that real property
in an estate by the entireties including an estate by the entireties
created under IC 32-17-3-1.
(a) (b) As used in this section, "joint matrimonial trust" means a
single inter vivos trust established under this section by settlors who
are related as husband and wife.
(b) (c) As used in this section, "matrimonial property" means real
property that:
(1) is subject to a written election to treat the property as
matrimonial property under this section; and
(2) is owned by a matrimonial trust.
(c) (d) As used in this section, "matrimonial trust" means a trust
established under this section to own matrimonial property.
(d) (e) As used in this section, "separate matrimonial trust" means
a separate trust that is also a matrimonial trust.
(e) (f) As used in this section, "separate trust" means a trust
established by one (1) individual.
(f) (g) A matrimonial trust may be established:
(1) jointly by a husband and wife; or
(2) in two (2) or more separate trusts.
(g) (h) A husband and wife may elect to treat real property as
matrimonial property with a written statement of the election:
(1) in an instrument or instruments conveying the real property to
a matrimonial trust or trusts; or
(2) in a separate writing that must be recorded in the county
where the real property is situated and indexed in the records of
the county recorder's office to the instrument or instruments that
convey the real property to a matrimonial trust or trusts.
(h) (i) A guardian of a husband and or wife may make an election
under this section:
(1) without the approval of the court if the guardian has unlimited
powers under IC 29-3-8-4; and
(2) with the approval of the court in all other cases.
(i) (j) An attorney in fact of a husband and wife may make join in
the making of an election under this section under the powers
conferred upon the attorney in fact by IC 30-5-5-2 if the power of
attorney is recorded in the county where the real property is situated
and indexed in the records of the county recorder's office to the
instrument or instruments that convey the real property to a
matrimonial trust or trusts.
(k) The terms of a separate matrimonial trust or a joint
matrimonial trust may (but are not required to) restrict the sale or
transfer of the matrimonial property for:
(1) the lifetime of the settlor who dies first;
(2) the lifetime of the surviving settlor; or
(3) another defined time period.
(j) (l) An interest in matrimonial property is not severable during the
marriage of the husband and wife unless:
(1) both the husband and wife join in the severance in writing; or
(2) a third party owns and forecloses a mortgage or other lien
against the interests of both the husband and wife in the
matrimonial property.
(k) (m) Notwithstanding any other provision of this section, the
legal rights of a lienholder that exist at the time of an election to treat
the real property subject to the lien as matrimonial property may not be
subject to a severance described in subsection (j) (l) without the
lienholder's written consent.
(l) A matrimonial trust established by an individual (n) To the
extent that a matrimonial trust continues to be a matrimonial trust
after the death of the a settlor (as provided by subsections (o) and
(q)):
(1) real property held or owned in a separate trust and for
which an earlier election was made under this section,
continues to be matrimonial property; and
(2) an unsecured creditor or judgment lien creditor who has
a claim only against the deceased settlor but not against the
surviving settlor cannot enforce that claim against the
deceased settlor's interest or the surviving settlor's interest in
the matrimonial property.
(o) Matrimonial property held in a separate matrimonial trust
or in a joint matrimonial trust continues to be matrimonial
property after the death of one (1) settlor:
(1) if the settlors reserved a life estate in the matrimonial
property for each settlor when they conveyed the matrimonial
property to the matrimonial trust or trusts; or
(2) if the deceased settlor's separate trust provides to the surviving
spouse: settlor:
(1) (A) a life estate;
(2) (B) an interest that qualifies for a deduction from the gross
estate of the decedent under Section 2056 of the Internal
Revenue Code regardless of whether an election is made to
qualify the interest for the deduction; or
(3) (C) in some respect the current right to occupy or receive
rent, royalties, or other kinds of income with respect to the
matrimonial property.
(m) (p) A separate matrimonial trust established by a deceased
settlor ceases to be a matrimonial trust upon the termination of
payments to the surviving spouse settlor as a result of the surviving
spouse's settlor's death or as a result of the surviving spouse's
settlor's valid disclaimer of all interests in the separate matrimonial
property held in the deceased settlor's trust.
(n) (q) A joint separate matrimonial trust ceases established by a
settlor who remains alive continues to be a matrimonial trust upon
the death of one (1) of the settlors. during that settlor's remaining
lifetime, so long as the settlor retains the right to use or occupy
matrimonial property held in the settlor's separate trust.
(o) (r) A matrimonial trust ceases to be a matrimonial trust upon the
dissolution of the marriage of the settlors.
(p) (s) A husband and wife may revoke a matrimonial trust by
together executing a writing expressing the revocation.
(1) whose last domicile was in Indiana; and
(2) who immediately before death had the power, acting alone, to prevent transfer of the property by revocation or withdrawal and:
(A) use the property for the benefit of the transferor; or
(B) apply the property to discharge claims against the transferor's probate estate.
(b) The term does not include a transfer at death (other than a transfer to or from the decedent's probate estate) of:
(1) a survivorship interest in a tenancy by the entireties real estate;
(2) a life insurance policy or annuity;
(3) the death proceeds of a life insurance policy or annuity;
(4) an individual retirement account or a similar account or plan; or
(5) benefits under an employee benefit plan.
Indiana.
(c) (d) With respect to a motor vehicle or a watercraft, a nonprobate
transfer occurs if the transferee obtains a certificate of title in Indiana
for:
(1) the motor vehicle under IC 9-17-2-2(b); or
(2) the watercraft as required by IC 9-31-2-16(a)(1)(C).
(d) (e) A transfer on death transfer completed under IC 32-17-14 is
a nonprobate transfer.
(1) an employee benefit plan governed by the Employees Retirement Income Security Act of 1974;
(2) an individual retirement account; or
(3) a similar account or plan intended to qualify for a tax exemption or deferral under the Internal Revenue Code;
unless the provisions of this chapter are incorporated into the governing instrument or beneficiary designation in whole or in part by express reference.
(1) "Beneficiary" means a person designated or entitled to receive property because of another person's death under a transfer on death transfer.
(2) "Beneficiary designation" means a written instrument other than a will or trust that designates the beneficiary of a transfer on death transfer.
(3) "Governing instrument" refers to a written instrument agreed to by an owner that establishes the terms and conditions of an ownership in beneficiary form.
(4) "Joint owners" refers to persons who hold property as joint tenants with a right of survivorship. However, the term does not include a husband and wife who hold property as tenants by the entirety.
(5) "LDPS" means an abbreviation of lineal descendants per stirpes, which may be used in a beneficiary designation to designate a substitute beneficiary as provided in section 22 of this chapter.
(6) "Owner" refers to a person or persons who have a right to designate the beneficiary of a transfer on death transfer.
(7) "Ownership in beneficiary form" means holding property under a registration in beneficiary form or other written instrument that:
(A) names the owner of the property;
(B) directs ownership of the property to be transferred upon the death of the owner to the designated beneficiary; and
(C) designates the beneficiary.
(8) "Person" means an individual, a sole proprietorship, a partnership, an association, a fiduciary, a trustee, a corporation, a limited liability company, or any other business entity.
(9) "Proof of death" means a death certificate or a record or report that is prima facie proof or evidence of an individual's death.
(10) "Property" means any present or future interest in real property, intangible personal property (as defined in IC 6-4.1-1-5), or tangible personal property (as defined in IC 6-4.1-1-13). The term includes:
(A) a right to direct or receive payment of a debt;
(B) a right to direct or receive payment of money or other benefits due under a contract, account agreement, deposit agreement, employment contract,
(C) a right to receive performance remaining due under a contract;
(D) a right to receive payment under a promissory note or a debt maintained in a written account record;
(E) rights under a certificated or uncertificated security;
(F) rights under an instrument evidencing ownership of property issued by a governmental agency; and
(G) rights under a document of title (as defined in IC 26-1-1-201).
(11) "Registration in beneficiary form" means titling of an account record, certificate, or other written instrument that:
(A) provides evidence of ownership of property in the name of the owner;
(B) directs ownership of the property to be transferred upon the death of the owner to the designated beneficiary; and
(C) designates the beneficiary.
(12) "Security" means a share, participation, or other interest in property, in a business, or in an obligation of an enterprise or
other issuer. The term includes a certificated security, an
uncertificated security, and a security account.
(13) "Transfer on death deed" means a deed that conveys an
interest in real property to a grantee by beneficiary designation.
(14) "Transfer on death transfer" refers to a transfer of property
that takes effect upon the death of the owner under a beneficiary
designation made under this chapter.
(15) "Transferring entity" means a person who:
(A) owes a debt or is obligated to pay money or benefits;
(B) renders contract performance;
(C) delivers or conveys property; or
(D) changes the record of ownership of property on the books,
records, and accounts of an enterprise or on a certificate or
document of title that evidences property rights.
The term includes a governmental agency, business entity, or
transfer agent that issues certificates of ownership or title to
property and a person acting as a custodial agent for an owner's
property. However, the term does not include a governmental
office charged with endorsing, entering, or recording the transfer
of real property in the public records.
(1) executed by the owner or owner's legal representative; and
(2) recorded with the recorder of deeds in the county in which the real property is situated before the death of the owner.
(b) A transfer on death deed is void if it is not recorded with the recorder of deeds in the county in which the real property is situated before the death of the owner.
(c) A transfer on death deed is not required to be supported by consideration or delivered to the grantee beneficiary.
(d) A transfer on death deed may be used to transfer an interest in real property to either a revocable or an irrevocable trust.
(e) If the owner records a transfer on death deed, the effect of the recording the transfer on death deed is determined as follows:
(1) If the owner's interest in the real property is as a tenant by the entirety, the conveyance is inoperable and void unless the other spouse joins in the conveyance.
(2) If the owner's interest in the real property is as a joint tenant with rights of survivorship, the conveyance severs the joint tenancy and the cotenancy becomes a tenancy in common.
(3) If the owner's interest in the real property is as a joint tenant with rights of survivorship and the property is subject to a beneficiary designation, a conveyance of any joint owner's interest has no effect on the original beneficiary designation for the nonsevering joint tenant.
(4) If the owner's interest is as a tenant in common, the owner's interest passes to the beneficiary as a transfer on death transfer.
(5) If the owner's interest is a life estate determined by the owner's life, the conveyance is inoperable and void.
(6) If the owner's interest is any other interest, the interest passes in accordance with this chapter and the terms and conditions of the conveyance establishing the interest. If a conflict exists between the conveyance establishing the interest and this chapter, the terms and conditions of the conveyance establishing the interest prevail.
(f) A beneficiary designation in a transfer on death deed may be worded in substance as "(insert owner's name) conveys and warrants (or quitclaims) to (insert owner's name), TOD to (insert beneficiary's name)". This example is not intended to be exhaustive.
(g) A transfer on death deed using the phrase "pay on death to" or the abbreviation "POD" may not be construed to require the liquidation of the real property being transferred.
(h) This section does not preclude other methods of conveying real property that are permitted by law and have the effect of postponing enjoyment of an interest in real property until after the death of the owner. This section applies only to transfer on death deeds and does not invalidate any deed that is otherwise effective by law to convey title to the interest and estates provided in the deed.
(i) The endorsement of the auditor under IC 36-2-11-14 is not necessary to record a transfer on death deed.
(b) Subsection (a) does not apply to a provision of a beneficiary designation that:
(1) has been made irrevocable, or revocable only with the spouse's consent;
(2) is made after the marriage is dissolved or annulled; or
(3) expressly states that the dissolution or annulment of the marriage does not affect the designation of a spouse or a relative of the spouse as a beneficiary.
(c) A provision of a beneficiary designation that is revoked solely by subsection (a) is revived by the owner's remarriage to the former spouse or by a nullification of the dissolution or annulment of the marriage.
(b) A beneficiary designation designating the children of the owner or children of any other person as a class and not by name includes all children of the person regardless of whether the child is born or adopted before or after the beneficiary designation is made.
(c) Except as provided in subsection (d), a child of the owner born or adopted after the owner makes a beneficiary designation that names another child of the owner as the beneficiary is entitled to receive a fractional share of the property that would otherwise be transferred to the named beneficiary. The share of the property to which each child of the owner is entitled to receive is expressed as a fraction in which the numerator is one (1) and the denominator is the total number of the owner's children.
(d) A beneficiary designation or a governing instrument may provide that subsection (c) does not apply to an owner's beneficiary designation. In addition, a transferring entity is not obligated to apply subsection (c) to property registered in beneficiary form.
(e) If a beneficiary designation does not name any child of the owner as the designated beneficiary with respect to a particular property interest, a child of the owner born or adopted after the owner makes the beneficiary designation is not entitled to any share of the property interest subject to the designation.
a transferring entity is required to carry out a transfer on death transfer
as described in section 7 of this chapter, a transferring entity may not
adopt rules for the making, execution, acceptance, and revocation of a
beneficiary designation that are inconsistent with this chapter. A
transferring entity may adopt the rules imposed by subsection (b) in
whole or in part by incorporation by reference.
(b) Except as otherwise provided in a beneficiary designation, a
governing instrument, or any other applicable law, the following rules
apply to a beneficiary designation:
(1) A beneficiary designation or a request for registration of
property in beneficiary form must be made in writing, signed by
the owner, dated, and, in the case of a transfer on death deed,
compliant with all requirements for the recording of deeds.
(2) A security that is not registered in the name of the owner may
be registered in beneficiary form on instructions given by a broker
or person delivering the security.
(3) A beneficiary designation may designate one (1) or more
primary beneficiaries and one (1) or more contingent
beneficiaries.
(4) On property registered in beneficiary form, a primary
beneficiary is the person shown immediately following the
transfer on death direction. Words indicating that the person is a
primary beneficiary are not required. The name of a contingent
beneficiary in the registration must have the words "contingent
beneficiary" or words of similar meaning to indicate the
contingent nature of the interest being transferred.
(5) Multiple surviving beneficiaries share equally in the property
being transferred unless a different percentage or fractional share
is stated for each beneficiary. If a percentage or fractional share
is designated for multiple beneficiaries, the surviving
beneficiaries share in the proportion that their designated shares
bear to each other.
(6) A transfer of unequal shares to multiple beneficiaries for
property registered in beneficiary form may be expressed in
numerical form following the name of the beneficiary in the
registration.
(7) A transfer on death transfer of property also transfers any
interest, rent, royalties, earnings, dividends, or credits earned or
declared on the property but not paid or credited before the
owner's death.
(8) If a distribution by a transferring entity under a transfer on
death transfer results in fractional shares in a security or other
property that is not divisible, the transferring entity may distribute
the fractional shares in the name of all beneficiaries as tenants in
common or as the beneficiaries may direct, or the transferring
entity may sell the property that is not divisible and distribute the
proceeds to the beneficiaries in the proportions to which they are
entitled.
(9) On the death of the owner, the property, minus all amounts
and charges owed by the owner to the transferring entity, belongs
to the surviving beneficiaries and, in the case of substitute
beneficiaries permitted under section 22 of this chapter, the lineal
descendants of designated beneficiaries who did not survive the
owner are entitled to the property as follows:
(A) If there are multiple primary beneficiaries and a primary
beneficiary does not survive the owner and does not have a
substitute under section 22 of this chapter, the share of the
nonsurviving beneficiary is allocated among the surviving
beneficiaries in the proportion that their shares bear to each
other.
(B) If there are no surviving primary beneficiaries and there
are no substitutes for the nonsurviving primary beneficiaries
under section 22 of this chapter, the property belongs to the
surviving contingent beneficiaries in equal shares or according
to the percentages or fractional shares stated in the
registration.
(C) If there are multiple contingent beneficiaries and a
contingent beneficiary does not survive the owner and does not
have a substitute under section 22 of this chapter, the share of
the nonsurviving contingent beneficiary is allocated among the
surviving contingent beneficiaries in the proportion that their
shares bear to each other.
(10) If a trustee designated as a beneficiary:
(A) does not survive the owner;
(B) resigns; or
(C) is unable or unwilling to execute the trust as trustee and
no successor trustee is appointed in the twelve (12) months
following the owner's death;
the transferring entity may make the distribution as if the trust did
not survive the owner.
(11) If a trustee is designated as a beneficiary and no affidavit of
certification of trust or probated will creating an express trust is
presented to the transferring entity within the twelve (12) months
after the owner's death, the transferring entity may make the
distribution as if the trust did not survive the owner.
(12) If the transferring entity is not presented evidence during the
twelve (12) months after the owner's death that there are lineal
descendants of a nonsurviving beneficiary for whom LDPS
distribution applies who survived the owner, the transferring
entity may make the transfer as if the nonsurviving beneficiary's
descendants also failed to survive the owner.
(13) If a beneficiary cannot be located at the time the transfer is
made to located beneficiaries, the transferring entity shall hold the
missing beneficiary's share. If the missing beneficiary's share is
not claimed by the beneficiary or by the beneficiary's personal
representative or successor during the twelve (12) months after
the owner's death, the transferring entity shall transfer the share
as if the beneficiary did not survive the owner.
(14) A transferring entity has no obligation to attempt to locate a
missing beneficiary, to pay interest on the share held for a missing
beneficiary, or to invest the share in any different property.
(15) Cash, interest, rent, royalties, earnings, or dividends payable
to a missing beneficiary may be held by the transferring entity at
interest or reinvested by the transferring entity in the account or
in a dividend reinvestment account associated with a security held
for the missing beneficiary.
(16) If a transferring entity is required to make a transfer on death
transfer to a minor or an incapacitated adult, the transfer may be
made under the Indiana Uniform Transfers to Minors Act, the
Indiana Uniform Custodial Trust Act, or a similar law of another
state.
(17) A written request for the execution of a transfer on death
transfer may be made by any beneficiary, a beneficiary's legal
representative or attorney in fact, or the owner's personal
representative.
(18) A transfer under a transfer on death deed occurs
automatically upon the owner's death subject to the requirements
of subdivision (20) and does not require a request for the
execution of the transfer.
(19) A written request for the execution of a transfer on death
transfer must be accompanied by the following:
(A) A certificate or instrument evidencing ownership of the
contract, account, security, or property.
(B) Proof of the deaths of the owner and any nonsurviving
beneficiary.
(C) An inheritance tax waiver from states that require it.
(D) In the case of a request by a legal representative, a copy of the instrument creating the legal authority or a certified copy of the court order appointing the legal representative.
(E) Any other proof of the person's entitlement that the transferring entity may require.
(20) On the death of an owner whose transfer on death deed has been recorded, the beneficiary shall file an affidavit in the office of the recorder of the county in which the real property is located. The affidavit must be endorsed by the county auditor under IC 36-2-11-14 in order to be recorded. The affidavit must contain the following:
(A) The legal description of the property.
(B) A certified copy of the death certificate certifying the owner's death.
(C) The name and address of each designated beneficiary who survives the owner or is in existence on the date of the owner's death.
(D) The name of each designated beneficiary who has not survived the owner's death or is not in existence on the date of the owner's death.
(E) A cross-reference to the recorded transfer on death deed.
(c) A beneficiary designation is presumed to be valid. A party may rely on the presumption of validity unless the party has actual knowledge that the beneficiary designation was not validly executed. A person who acts in good faith reliance on a transfer on death deed is immune from liability to the same extent as if the person had dealt directly with the named owner and the named owner had been competent and not incapacitated.
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