Probate is the legal procedure through which a person’s estate is administered after their passing. This process is supervised by a court and makes clear who will inherit the decedent’s assets. Not only is the probate process used to distribute a decedent’s property to their beneficiaries, but also to creditors and tax authorities. However, it’s important to understand that going through probate is not always necessary.
When is the Probate Process Necessary?
Many people have the misconception that probate is only required when the decedent had a will in place at the time of their passing. Specifically, whether probate is necessary depends upon the type of assets the decedent left behind and how they are titled. An estate must go through probate if: 1) the assets were owned solely in the decedent’s name and the total value of the estate exceeds $100,000; or 2) the decedent possessed real estate outside of a trust that was not jointly owned.
Assets that are not included in probate include those contained in a trust or in an account with a designated beneficiary. Life insurance proceeds are also excluded from the probate process. These assets would pass directly to a beneficiary.
Can a Small Estate Avoid Probate?
A small estate may be able to avoid the formal probate process entirely. If a decedent did not own any real estate and the total amount of property is valued at $100,000 or less, a small estate affidavit may be used to transfer the decedent’s property and pay outstanding debts. However, the procedure can also be utilized if the decedent’s real estate was contained in a trust or was part of a joint tenancy, and the remaining assets do not exceed the threshold for a small estate.
In some cases, a small estate affidavit may even be used when a wealthy individual passes away. If most of their property was placed in trusts, the procedure can be used in connection with a pour-over will to avoid the lengthy and costly probate process. Regardless of whether the size of the estate qualifies, there are instances when the small estate procedures should not be used — such as in cases involving unpaid creditors or in the event the will is questionable.
The affidavit is relatively easy to fill out. While it does not need to be filed with the court, it must be sworn to and signed in front of a notary. The affidavit can be presented to a company, bank, or entity with access to the decedent’s property, allowing the beneficiary to obtain their inheritance.
Strategies to Avoid Probate
There are various ways to avoid probate, despite how large an estate might be. Critically, avoidance of probate requires careful estate planning in advance. Common strategies used to avoid probate can include the following:
- Transfer assets prior to death — Gifting property and assets to family and friends prior to death can reduce the value of an estate to avoid the formal probate process. Gifting can also have significant tax benefits when utilized correctly.
- Set up a living trust — By setting up a living trust, the assets are transferred during the lifetime of the settlor. The assets are distributed to the settlor’s beneficiaries upon their passing and probate is avoided.
- Establish joint ownership of property — When someone passes away, jointly owned property passes to the surviving owner and probate is not required.
- Use a beneficiary designation — Beneficiaries named on certain accounts, such as savings accounts, retirement benefit accounts, and life insurance policies can receive the assets bequeathed to them directly.
The strategies that may be implemented to avoid probate can depend upon a number of factors, such as the amount of total assets in the estate, the type of property owned, and the testator’s objectives.
What Happens During the Probate Process?
Before the probate process begins, there are several steps that must be taken. Upon a person’s death, their will must be filed in the county in which they passed within 30 days of it being discovered. Unless there is a problem with the will, it will be admitted to probate. If the will does not name an executor, the court will appoint a personal representative to guide the estate through the probate process and handle the details of the administration.
Once the estate has been opened, notice of the probate hearing must be given to the decedent’s beneficiaries. This allows them the opportunity to contest the will in probate court. Creditors must also be notified so that they can make a claim against the assets of the estate. In addition to the formal notices, a “claims publication” must be published in a local newspaper. Any unknown creditors and claimants have six months from the date of publication to file their claims, otherwise they will be barred.
During probate, the executor must identify the decedent’s property and determine whether they have any liabilities. After this process has been completed, the executor must do a final accounting and distribute the assets in accordance with the will. In the event there was no will, the estate will be divided pursuant to Illinois intestate law. Once the beneficiaries have received their shares of the estate and the final accounting has been approved, the estate can be closed — provided the six-month claims period has expired.
Probate can take anywhere from six months to several years, depending upon whether any issues are disputed.
Contact an Experienced Illinois Probate Attorney
Going through probate after a loved one passes can be complex and emotionally overwhelming. It’s best to have a knowledgeable attorney on your side who can help you navigate the nuances of the legal process. Located in Rolling Meadows, Illinois and serving clients throughout the Northwest suburbs and Chicago area, Hess Law Firm provides reliable counsel for a broad scope of probate and estate administration matters. Call (847) 367-6990 or email firstname.lastname@example.org today to schedule an appointment.