Legal Question in Wills and Trusts in Indiana

Re: Inheritance, Estate Tax

You are right to be confused. Technically, the Indiana death tax is an inheritance tax, chargeable to the beneficiary, including beneficiaries of non-probated assets like joint bank accounts or annuities. However, it is very common that the will a person has drafted (or their attorney has drafted) provides that any inheritance tax be paid from the "estate." So the inheritance tax becomes an obligation of the estate if it can be paid after paying the expenses of administration (like lawyer fees, funeral expenses and other taxes.) But if the probate estate isn't large enough to pay both the expenses of administration and the inheritance taxes, then the beneficiaries will be responsible to the Indiana Department of Revenue for their share of inheritance tax. If the will does not provide for payment of inheritance taxes, then the beneficiaries should be charged with responsibility to pay their share.