CHAPTER 13. LIABILITY OF NONPROBATE TRANSFEREES FOR CREDITOR CLAIMS AND STATUTORY ALLOWANCES
IC 32-17-13
Chapter 13. Liability of Nonprobate Transferees for Creditor
Claims and Statutory Allowances
IC 32-17-13-1
"Nonprobate transfer" defined
Sec. 1. (a) As used in this chapter, "nonprobate transfer" means a
valid transfer, effective at death, by a transferor:
(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.
The term does not include transfer of a survivorship interest in a
tenancy by the entireties real estate, transfer of a life insurance policy
or annuity, or payment of the death proceeds of a life insurance
policy or annuity.
(b) With respect to a nonprobate transfer involving a multiple
party account, a nonprobate transfer occurs if the last domicile of the
depositor whose interest is transferred under IC 32-17-11 was in
Indiana.
(c) 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) A transfer on death transfer completed under IC 32-17-14 is
a nonprobate transfer.
As added by P.L.165-2002, SEC.11. Amended by P.L.143-2009,
SEC.40; P.L.6-2010, SEC.22.
IC 32-17-13-2
Insufficiency of estate to pay claims and statutory allowances;
liability of nonprobate transferee
Sec. 2. (a) Except as otherwise provided by statute, a transferee
of a nonprobate transfer is subject to liability to a decedent's probate
estate for:
(1) allowed claims against the decedent's probate estate; and
(2) statutory allowances to the decedent's spouse and children;
to the extent the decedent's probate estate is insufficient to satisfy
those claims and allowances.
(b) The liability of the nonprobate transferee may not exceed the
value of nonprobate transfers received or controlled by the
nonprobate transferee.
(c) The liability of the nonprobate transferee does not include the
net contributions of the nonprobate transferee.
As added by P.L.165-2002, SEC.11.
IC 32-17-13-3
Priority of liability to probate estate
Sec. 3. Nonprobate transferees are liable for the insufficiency
described in section 2 of this chapter in the following order:
(1) As provided in the decedent's will or other governing
instrument.
(2) To the extent of the value of the nonprobate transfer
received or controlled by the trustee of trusts that can be
amended, modified, or revoked by the decedent during the
decedent's lifetime. If there is more than one (1) such trust, in
proportion to the relative value of the trusts.
(3) Other nonprobate transferees in proportion to the values
received.
As added by P.L.165-2002, SEC.11.
IC 32-17-13-4
Beneficiary interests in trusts
Sec. 4. Unless otherwise provided by the trust instrument, interest
of beneficiaries in all trusts incurring liabilities under this chapter
shall abate as necessary to satisfy the liability as if all of the trust
instruments were a single trust.
As added by P.L.165-2002, SEC.11. Amended by P.L.101-2008,
SEC.11.
IC 32-17-13-5
Apportionment of liability by instrument
Sec. 5. (a) A provision made in an instrument may direct the
apportionment of the liability among the nonprobate transferees
taking under that or any other governing instrument.
(b) If a provision in an instrument conflicts with a provision in
another instrument, the later provision prevails.
As added by P.L.165-2002, SEC.11.
IC 32-17-13-6
Enforcement proceedings; jurisdiction
Sec. 6. Upon due notice to a nonprobate transferee, the liability
imposed by this chapter is enforceable in proceedings in Indiana in
the county where:
(1) the transfer occurred;
(2) the transferee is located; or
(3) the probate action is pending.
As added by P.L.165-2002, SEC.11.
IC 32-17-13-7
Commencement of proceedings; immunity of personal
representative
Sec. 7. (a) A proceeding under this chapter may not be
commenced unless the personal representative of the decedent's
estate has received a written demand for the proceeding from the
surviving spouse or a surviving child, to the extent that statutory
allowances are affected, or a creditor.
(b) If the personal representative declines or fails to commence a
proceeding within sixty (60) days after receiving the demand, a
person making the demand may commence the proceeding in the
name of the decedent's estate at the expense of the person making the
demand and not of the estate.
(c) A personal representative who declines in good faith to
commence a requested proceeding incurs no personal liability for
declining.
As added by P.L.165-2002, SEC.11. Amended by P.L.6-2010,
SEC.23.
IC 32-17-13-8
Deadline for commencement of proceedings
Sec. 8. A proceeding under this chapter must be commenced not
later than nine (9) months after the person's death, but a proceeding
on behalf of a creditor whose claim was timely filed may be
commenced within:
(1) sixty (60) days after final allowance of the claim; or
(2) ninety (90) days after demand is made under section 7 of
this chapter if the personal representative declines or fails to
commence a proceeding after receiving the demand.
As added by P.L.165-2002, SEC.11. Amended by P.L.6-2010,
SEC.24.
IC 32-17-13-9
Release of obligor or trustee from liability for transfer of assets to
nonprobate transferee
Sec. 9. Unless written notice asserting that a decedent's probate
estate is insufficient to pay allowed claims and statutory allowances
has been received from the decedent's personal representative, the
following rules apply:
(1) Payment or delivery of assets by a financial institution,
registrar, or another obligor to a nonprobate transferee under the
terms of the governing instrument controlling the transfer
releases the obligor from all claims for amounts paid or assets
delivered.
(2) A trustee receiving or controlling a nonprobate transfer is
released from liability under this section on any assets
distributed to the trust's beneficiaries. Each beneficiary, to the
extent of the distribution received, becomes liable for the
amount of the trustee's liability attributable to that asset
imposed by sections 2 and 3 of this chapter.
As added by P.L.165-2002, SEC.11.