It may not appear like it, but probate in Illinois can be a nasty four-letter word. About 5 percent of a person’s property can be spent by the time probate runs its course, which may take up to 2 years in Illinois probate court.
Probate in Illinois occurs when an Illinois resident owns assets titled in his or her name at the time of death. When this happens, probate is the process by which the ownership of these belongings is changed to a beneficiary. The Illinois probate process is very proficient at what it was designed to do: determine inheritance. But a significant amount of time and money is often wasted during the Illinois probate process when proper estate planning isn’t in place.
Probate in Illinois
There are three main types of probate in Illinois. The first occurs when the deceased individual owns assets consisting of personal property valued at $100,000 or less. In this situation, an actual Illinois probate court proceeding may not be necessary. Instead, the lawyer can prepare a Small Estate Affidavit.
If the estate is greater than $100,000 or consists of any real estate at all, then an Illinois probate court proceeding is most likely necessary. This could consist of either the second or third type of probate in Illinois: Supervised Administration or Independent Administration. At one time in Illinois, Supervised Administration was necessary to administer any estate valued more than $100,000 or consisting of any real estate at all. In Supervised Administration, the estate’s executor needs to obtain a court order to do any act of estate administration.
More recently, however, states like Illinois streamlined their probate procedure to include a third type: Independent Administration. This is still a court proceeding, but it is much more simplified. With Independent Administration, the executor of the estate appears in Illinois probate court twice: once to open the estate and then once to close the estate.
How Estate Planning Can Help
When a deceased person has only a will or no formal final wishes at all, a probate proceeding will pay off creditors first and the family receives what’s left.
An estate plan that includes a Living Trust allows certain assets to be transferred directly to heirs immediately without court proceedings. To a family business, for instance, this can make an invaluable difference. However, many people are intimidated by the up-front cost of putting together an estate plan.
An estate plan will cost up to $5,000 (depending on your situation). And the cost of administering a trust is usually about1 percent of the trust’s value. While that seems like a significant amount, it is up to 80 percent less than the potential cost of probate. An estate plan can also save a family a significant amount in taxes including capital gains taxes, estate taxes, and gift taxes.
Another important aspect of Living Trusts is that they can help keep the details of an estate private. Any assets subjected to Illinois probate that are outside of a trust become public record. This can be a significant problem. When this happens, very personal family information like house ownership and value are made public for business opportunists, nosy neighbors and distant relatives alike.
For anyone with assets totaling more than $100,000 or who owns real estate property, a consultation with an estate planning attorney is advisable. Many law offices offer free consultations. Additionally, the cost of attorney fees can be tax deductable.
This guide is only a brief overview of probate in Illinois and should not be considered a substitute for legal advice. For guidance on your specific situation, please consult an estate planning attorney licensed to practice in the state of Illinois.