Most of what adult children need to know about Indiana estate and incapacity planning is concentrated in a small number of documents. Indiana's repeal of its inheritance tax in 2013 means fewer state-specific tax complications than in neighboring states — but POA, healthcare consent, and probate rules still differ from what families used to.
The four documents to have in place this year
These are universally applicable in Indiana regardless of wealth or family structure. Most cost between $300 and $1,200 through an Indiana-licensed attorney; the trust adds $1,200– $3,500.
1. Power of Attorney (Indiana Code 30-5)
An Indiana POA names a person (the agent or attorney-in-fact) to handle your parent's financial affairs if they become unable to. Indiana law requires notarization. Witnesses are not strictly required by statute but are widely recommended.1
For maximum bank acceptance, the document should be durable (surviving incapacity) and signed in front of a notary. Banks and brokerages can be conservative about accepting out-of-state POAs and pre-2008 documents (when Indiana's POA statute was substantially revised). A bank-friendly Indiana POA from a local attorney is worth the modest cost.
2. Appointment of Health Care Representative (IC 16-36-1.5)
Indiana uses an Appointment of Health Care Representative document, which names a person to make medical decisions when your parent cannot communicate their wishes. The document requires either witnesses (two adults) or notarization. Indiana recognizes this as separate from financial POA — medical decisions and money are handled by different documents (though the same person can serve both roles).2
3. Living Will Declaration (IC 16-36-4)
Indiana's Living Will Declaration expresses your parent's wishes about end-of-life care — specifically, whether to withhold or withdraw life-prolonging procedures in defined terminal conditions. The document requires two adult witnesses. Works alongside the Appointment of Health Care Representative.
4. Revocable Living Trust
A revocable trust is the workhorse of Indiana estate planning for families who want to avoid probate. Your parent transfers assets into the trust during life, retains full control as trustee, and names a successor trustee to manage and distribute assets at death without probate. Indiana adopted versions of modern trust legislation under IC 30-4.
No state estate tax or inheritance tax
Indiana has no state estate tax (and never has had one) and repealed its inheritance tax effective for deaths on or after January 1, 2013 (IC 6-4.1, retroactively repealed).3 Federal estate-tax exemption (~$13.99M per individual in 2025) applies; nearly all Indiana estates owe no estate tax at any level.
That leaves Indiana families with three main estate-planning priorities:
- Incapacity planning. POA, healthcare documents, living will.
- Probate avoidance. Trust, TOD deeds, beneficiary designations.
- Medicaid planning. The 5-year look-back is the bigger financial issue for most Hoosier families. See our Medicaid guide.
Probate in Indiana
Indiana probate is governed by the Indiana Probate Code (IC 29-1). Three main paths:
- Small estate affidavit. For estates of $100,000 or less in gross probate assets (IC 29-1-8-1). The affidavit can be used 45 days after death to release personal property without formal probate.
- Unsupervised administration. Available when all heirs agree. Less court supervision; faster and cheaper.
- Supervised administration. Required when heirs disagree, the estate is contested, or unusual circumstances exist.
For estates exceeding $100,000 in non-trust personal property plus any real estate not titled in survivorship or TOD form, formal probate is generally required. Attorney's fees in Indiana probate are governed by reasonableness standards rather than statutory percentages — a typical formal probate on a $500,000 estate runs $4,000–$8,000 in attorney's fees plus court costs.4
Indiana homestead and creditor protections
Indiana provides a homestead exemption from forced sale by most judgment creditors, currently $19,300 per individual (IC 34-55-10-2). This is modest compared to Florida's unlimited or Texas's substantial homestead, but provides baseline protection. The exemption doesn't affect Medicaid (which uses the federal home-equity ceiling of ~$752,000) and doesn't protect against mortgages or property tax liens.5
What to do this quarter
- Locate (or create) your parent's four documents: POA, Appointment of Health Care Representative, Living Will, and (if appropriate) Revocable Living Trust.
- If documents exist but are more than 8 years old, have them reviewed — Indiana's POA statute revisions and changing IRS rules may have made earlier documents inadequate for specific purposes.
- Check whether real estate would benefit from a Transfer-on- Death deed — a simple and cheap probate-avoidance step.
- Get an estate-plan review if the will was drafted in another state.
- For companion content on Medicaid planning, see the Indiana Medicaid guide.