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Indiana Trust Administration
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Indiana Trust Administration

How an Indiana successor trustee settles a revocable living trust after death: informing beneficiaries, accounting, paying debts, and distributing assets.

By Settled Editorial

If you have been named the successor trustee of an Indiana revocable living trust, this guide explains what to do after the person who created the trust (the settlor) dies. You step in, take control of the trust property, keep the beneficiaries informed, pay valid debts and taxes, account for the money, and hand out what is left under the trust terms. Most of this work happens outside court, which is one reason families set up a living trust. For how the trust was built in the first place, see the Indiana revocable living trust guide.

Indiana trusts run under the Indiana Trust Code at IC 30-4. Indiana wrote its own trust code instead of adopting the Uniform Trust Code, so the notice rules and section numbers differ from neighboring states. This guide walks through the process in plain terms and points to the exact statute sections so you can read the law yourself. This is general information, not legal advice.

The Successor Trustee's Job at a Glance

Here is the sequence an Indiana trust administration usually follows:

  1. Accept the role and read the full trust document plus any amendments.
  2. Order certified death certificates and secure the trust property.
  3. Get a tax ID number for the trust and open a trust bank account.
  4. Keep the income beneficiaries reasonably informed and answer written requests.
  5. Take control of, value, and preserve the trust assets.
  6. Pay valid debts, final bills, and taxes.
  7. Deliver an annual written statement of accounts to the income beneficiaries.
  8. Hand out the remaining assets under the trust terms and close the trust.

Each step below explains what the law expects and where Indiana probate may still come into play.

Step 1: Accept the Role and Read the Trust

While the settlor was alive and able to revoke the trust, the trustee's duties ran to the settlor alone, and the beneficiaries' rights stayed under the settlor's control (IC 30-4-3-1.3). When the settlor dies, the revocable trust becomes irrevocable, and you move from a named backup to the acting trustee whose duties now run to the beneficiaries.

Indiana gives an incoming successor trustee some breathing room. If you follow a trustee who was also the settlor, you are not liable for what the settlor did or failed to do while serving as trustee, and you have no duty to investigate the prior handling, review the prior accounting, or bring an action over a past breach (IC 30-4-3-1.3). That said, read the entire trust document with care. Confirm who the beneficiaries are, what each one receives, any conditions on a distribution, whether the trust pays you for your work, and who serves after you.

Step 2: Secure the Property and Get Organized

Act early to protect what the trust holds:

  • Order at least 10 to 15 certified death certificates. Banks, title companies, and transfer agents each want their own copy.
  • Secure the home, vehicles, valuables, and paperwork. Change the locks if the settlor lived alone.
  • Keep insurance on real estate and vehicles in force so a lapse does not expose the trust to loss.
  • Redirect the mail so you can find bills, account statements, and tax notices.

Get a Trust Tax ID and Bank Account

While the settlor was alive, a revocable trust usually used the settlor's Social Security number. After death, the trust needs its own Employer Identification Number (EIN). Apply free through the IRS. Then open a checking account in the trust's name using that EIN, and run every trust payment through it. Keeping trust money separate from your own money creates a clean record and protects you later.

Step 3: Keep the Beneficiaries Informed

Indiana does not set the fixed 60 or 120-day notice clock that Uniform Trust Code states use. Instead, IC 30-4-3-6 gives you an ongoing duty. Unless the trust says otherwise, you must keep the following people reasonably informed about the administration and the facts they need to protect their interests: the current income beneficiary, and any beneficiary who becomes an income beneficiary once the trust turns irrevocable at the settlor's death.

Two written-request rights follow from the same section:

  • You satisfy the duty to inform by giving those beneficiaries, on their written request, access to the trust's accounting and financial records.
  • Once the trust is irrevocable, on the written request of an income beneficiary or remainderman, you must promptly give a copy of the complete trust instrument.

Send anything you provide in writing and keep a dated copy. Even when the beneficiaries are close family who already know the settlor died, a written record avoids later arguments about what you shared and when.

Step 4: Take Control of and Value the Trust Assets

Under IC 30-4-3-6 you must take possession of and keep control over the trust property, preserve it, make it productive for the income and remainder beneficiaries, and take reasonable action on any claims the trust holds. Build a full inventory of what the trust owns:

  • Real estate, with a date-of-death appraisal for each parcel
  • Bank accounts and certificates of deposit
  • Investment and brokerage accounts
  • Retirement accounts or life insurance that name the trust as beneficiary
  • Business interests
  • Vehicles, jewelry, collectibles, and other personal property

Value each asset as of the date of death. Get professional appraisals for real estate, business interests, and high-value items. Accurate date-of-death values matter for taxes and for splitting assets fairly among beneficiaries.

Watch for Assets the Trust Does Not Own

A trust only controls what was retitled into it. If the settlor signed an Indiana will but never moved an account or a deed into the trust, that asset may still need probate in Indiana. Many people pair a trust with a pour-over will that sends leftover property into the trust, but those assets usually pass through probate first. If there is no valid will for the out-of-trust property, the Indiana intestate succession rules decide who inherits it. Indiana also offers a small estate affidavit for modest personal-property estates. Confirm the current dollar limit with the court or an Indiana attorney.

Step 5: Manage the Assets Prudently

While you hold the assets, you owe a duty to invest and manage them with care. IC 30-4-3.5-2, the Indiana Uniform Prudent Investor Act, tells you to invest and manage trust assets as a prudent investor would, using reasonable care, skill, and caution, and to judge each decision in the context of the whole portfolio rather than in isolation. IC 30-4-3.5-3 tells you to diversify the investments unless special circumstances make that a poor fit for the trust.

You also owe a duty of loyalty. IC 30-4-3-7 bars a trustee from self-dealing: no loaning trust funds to yourself, no buying trust property for your own account, and no selling your own property to the trust, unless the trust or the statute allows it. When in doubt, stay away from any transaction that mixes your personal interest with the trust's. You do not need to be a financial expert. You do need to act sensibly, keep records, and get professional help for anything complicated.

Step 6: Pay Debts, Final Bills, and Taxes

Before any beneficiary receives a distribution, settle what the trust owes:

  • Final medical bills, utilities, and other valid debts
  • The settlor's final personal income tax return (Form 1040) for the year of death
  • A federal fiduciary income tax return (Form 1041), plus the matching Indiana fiduciary return (Form IT-41), if the trust earns enough income after death
  • Any federal estate tax, which reaches only very large estates

Indiana repealed its inheritance tax for deaths after December 31, 2012, and has no separate estate tax, so an Indiana trust does not owe a state death tax. Do not rush distributions. If you pay out the trust and then find an unpaid debt or tax, you can be left personally responsible for the shortfall. Hold a reasonable reserve until you are confident the debts and taxes are covered. A CPA who handles trust returns earns the fee on anything but the simplest estate.

Step 7: Account to the Beneficiaries

Indiana spells out the accounting duty in IC 30-4-5-12. Unless the trust provides otherwise, or an adult, competent beneficiary waives it in writing, you must deliver a written statement of accounts to each income beneficiary at least once a year. The statement has to show at least the receipts and disbursements since the last statement, and every item of trust property you hold on the date of the statement at its inventory value. This running record is what shows you handled the money honestly.

A beneficiary who wants more can petition the court to direct you to file a verified written statement of accounts (IC 30-4-5-12). The court will not, without good cause, make you file more than once a year. And you remain accountable to the beneficiaries for the trust estate the whole time: if you commit a breach of trust, IC 30-4-3-11 makes you liable for the loss, for any profit you made through the breach, and for the beneficiary's reasonable attorney's fees.

Habits that keep you out of trouble:

  • Send a written statement on a regular schedule, not only at the end.
  • Keep every receipt, statement, and appraisal in an organized file.
  • Answer reasonable written requests promptly.
  • Get a signed receipt from each beneficiary when you hand over a distribution.

What You Can Be Paid

Under IC 30-4-5-16, unless the trust sets your fee, you are entitled to reasonable compensation from the trust estate for acting as trustee, and you may be reimbursed for expenses you properly incur. If the trust does set your fee, you are paid as stated, though the court may allow more or less when your duties turn out very different from what the trust anticipated, or the stated amount is unreasonably high or low. Many family trustees waive a fee to leave more for the beneficiaries. If you do take one, disclose it in your accounting.

Step 8: Hand Out the Assets and Close the Trust

Once debts and taxes are handled and the reserve is no longer needed, distribute what remains according to the trust terms, since IC 30-4-3-6 requires you to administer the trust as the document directs. Follow this order:

  • Make specific gifts first, the items or dollar amounts left to named people.
  • Distribute the residue, what is left after specific gifts and expenses, to the residuary beneficiaries.
  • Keep any sub-trusts running if the document creates them, such as a trust for a minor or a beneficiary who should not receive a lump sum.

To move real estate to a beneficiary, sign and record a trustee's deed with the county recorder where the land sits. Get a signed receipt for every distribution. After the final statement of accounts goes out and the last asset changes hands, the trust is settled.

How This Fits Into Your Estate Plan

Trust administration works best when the rest of the plan is in place. A funded living trust holds and passes assets without probate, but it does not cover property left out of the trust. A valid Indiana will, often a pour-over will, catches anything the settlor never moved in. A trustee's job overlaps with an executor's, so the Indiana executor duties guide is worth a read if you serve in both roles.

If some assets were never retitled into the trust, the Indiana probate guide explains the court process those assets may still need, and the Indiana probate accounting guide covers the settlement a personal representative files. For where trusts sit among the planning documents, start with the Indiana estate planning basics. To compare a trust with the other ways families keep assets out of court, see how to avoid probate in Indiana.

Common Questions

Does an Indiana trustee have to notify beneficiaries within a set number of days?

No. Indiana does not use the fixed 60 or 120-day notice clock that Uniform Trust Code states use. Under IC 30-4-3-6, you must keep the current income beneficiary and any successor income beneficiary reasonably informed, and on written request give them access to the trust's accounting and financial records plus a copy of the complete trust instrument once the trust is irrevocable.

Does an Indiana trust go through probate?

Assets titled in the name of the trust pass under the trust terms without probate. Anything the settlor owned but never funded into the trust may still need probate, which is why many plans include a pour-over will. See the Indiana probate guide for the court process.

How often must an Indiana trustee provide an accounting?

Under IC 30-4-5-12, unless the trust says otherwise or an adult, competent beneficiary waives it in writing, you deliver a written statement of accounts to each income beneficiary at least once a year, showing the receipts, disbursements, and the trust property at its inventory value. A beneficiary can also petition the court for a verified statement.

Can an Indiana trustee be paid?

Under IC 30-4-5-16, unless the trust sets the fee, a trustee is entitled to reasonable compensation from the trust estate, and the court may allow more or less in narrow cases. Disclose any fee you take in your accounting.

Does Indiana charge an inheritance or estate tax on a trust?

No. Indiana repealed its inheritance tax for deaths after December 31, 2012, and has no estate tax. A large estate may still owe federal estate tax, and the trust may owe federal and Indiana fiduciary income tax on income it earns after the settlor's death.

The Bottom Line

As an Indiana successor trustee, your duties come straight from the Indiana Trust Code: accept the role, take control of the property, keep the income beneficiaries reasonably informed under IC 30-4-3-6, invest with the prudent-investor care that IC 30-4-3.5 sets, pay debts and taxes, deliver an annual statement of accounts under IC 30-4-5-12, and hand out what remains under the trust terms. Work carefully, document each step, and pay debts before you pay beneficiaries. For real estate transfers, tax filings, or any dispute, an Indiana trust attorney can keep a clean process from going sideways.

This guide is general information about Indiana trust administration. Confirm anything that affects your situation with the probate court or a licensed Indiana attorney.

Sources:

It is not legal advice.

Information current as of July 18, 2026

Settled Estate is not a law firm, and this content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Indiana can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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