Losing a loved one is a difficult and emotional time. This tough transition can be made even harder when you need to navigate through a complex and time-consuming court process. In Illinois, the legal process for administering someone’s estate after they have died is often called probate. The ultimate goal of probate is to ensure that the financial matters and property of the deceased (also known as the decedent) are handled in line with their wishes, and all state and local laws. This includes distributing their estate assets to their heirs or legatees, and ensuring that debts owed to creditors are paid off or resolved.
What Goes Into Probate Administration?
Broadly speaking, the probate process involves gathering the decedent’s documents and filing their will with the courts. If there is no valid will, then the estate is said to be intestate, and the process of intestate succession comes into play.
The decedent may have named an executor or personal representative in their will; if not, one will be appointed by the court. The executor is the person with the responsibility of guiding the estate through the probate process, including ensuring that debts and liabilities are paid or resolved and that the decedent’s assets are distributed in accordance with their wishes. In order to do so, the executor will be responsible for inventorying and accounting the decedent’s assets.
The administration of an estate may occur through Supervised Administration or Independent Administration, which require different levels of oversight from the court based on the unique circumstances of the case — including the size of the estate and whether or not there are any disputes or contests.
Once all bills and debts are resolved and the decedent’s assets have been distributed, the executor may then file a final accounting of the process and close the estate with the court.
The probate process can be long and complicated, and it can be made even more complex based around the unique circumstances of the decedent’s estate. As an example, distributions to minors or disabled persons will require special attention, as will any distributions meant for deceased beneficiaries. Probate can also drag out if there are lots of questions or disputes around the estate — whether over the validity of the will, the distribution of certain assets, or the actions of the executor.
If the decedent leaves behind a significant number of assets that need to go through probate, this can make probate more time-intensive. For this reason, it’s important to understand the distinctions between probate and assets and non-probate assets, and what they mean for the administration of an estate.
Do All of a Decedent’s Assets Need to Go Through Probate?
It’s important to keep in mind that not all of your assets will be required to go through probate — particularly if you take some key steps to prepare when you have the opportunity.
In some cases, small estates may be eligible to avoid probate altogether if they fall below a certain gross dollar amount and don’t contain any real estate. An attorney can help you determine if a loved one’s Illinois estate may be able to avoid probate through a small estate affidavit.
In other cases, the estate administration process can be streamlined significantly if the decedent leaves more non-probate assets than probate assets. If an asset does not need to go through probate, this means that it can be transferred much more quickly and efficiently, without the supervision of the court — which may make things easier for your loved ones in a difficult time.
Broadly speaking, the assets that will need to go through probate are those that are owned completely by the decedent. Perhaps most commonly, this category includes items like jewelry, personal belongings, and furniture, as well as real estate owned solely by the decedent or financial accounts and policies without a named beneficiary.
Non-probate assets are those that have a clear recipient — whether because the decedent owned jointly with another person, or because the assets have a designated beneficiary. Generally, assets will be able to bypass probate if they fall into one of these major categories:
Property Owned as Joint Tenants With Rights of Survivorship or Tenants By the Entirety
When two people jointly own property with “rights of survivorship,” then the surviving owner automatically assumes full ownership of the property when the other passes, without the asset having to go through probate. Most commonly, this type of ownership is used for real estate, but it can apply to personal property as well.
In Illinois, there are two ways to hold joint title that allow you to transfer ownership outside of probate:
- Joint tenancy with rights of survivorship. In this arrangement, two or more people each hold an equal interest in the property. This type of co-ownership grants the surviving owner the right to automatically inherit the decedent’s share, which allows the property to be transferred out of probate.
- Tenancy by the entirety. Tenancy by the entirety is a special form of ownership reserved for married couples in Illinois. It can only be used for real estate. This arrangement confers rights of survivorship to the surviving spouse, and can offer some protections from creditors.
In Illinois, there is a third type of joint ownership that does not offer rights of survivorship, known as tenancy in common. When two or more people own property as tenants in common, their interest in the property does not avoid probate. Instead, the owner may transfer their individual interest to a legatee through their will, or allow it to pass to their heirs.
Property Held in a Trust
A trust is a legal arrangement that allows a third party, known as the trustee, to hold and manage assets on behalf of your chosen beneficiary. Once the person who created the trust passes away, the trustee can transfer the property to the trust beneficiaries without probate court proceedings.
Revocable living trusts are a common mechanism in estate planning because they can allow many valuable assets to be handled outside of probate, from real estate to financial accounts to personal property. This can allow your loved ones to gain access to their inheritance more quickly, and keep private matters out of the public eye.
Trusts can also give you a level of control over your assets, even after you’re gone. For instance, you can use a trust to determine when a beneficiary may be able to access his or her inheritance, or leave special provisions for the care of a minor or disabled adult.
Assets and Accounts with Payable-on-Death (POD) or Transfer-on-Death (TOD) Designations
Assets with beneficiary designations can avoid probate. Most commonly, this category includes financial assets — including bank accounts, brokerage accounts, insurance policies, retirement accounts, and securities.
With a payable-on-death (POD) designation on an account or policy, your chosen beneficiary can claim the money directly from the financial institution, without the need to go through the probate court. A transfer-on-death (TOD) designation allows you to name a beneficiary who will assume ownership of the asset upon your death. While this is most commonly associated with stocks, bonds, and brokerage accounts, Illinois residents can also use the transfer-on-death instrument for real estate and vehicles, in certain circumstances.
The Importance of Planning Ahead for Probate
There are many steps you can take to make difficult life transitions easier for the people who matter most to you. Getting a handle on your property and assets and preparing for probate are important steps you can take now — with enormous benefits to offer your loved ones down the line.
Planning ahead can help keep peace within your family, minimizing the risk for strife and arguments. At the same time, you can help secure your family’s future, saving them time, money, and stress when it comes to the complex legal process of probate.
Whether you are ready to take some steps to safeguard your assets, or are dealing with the legal aftermath of losing someone close to you, an experienced probate attorney is an important partner to have on your side.
That’s where our team would be happy to step in and help. At The Law Offices of J. Jeltes, LTD., our team of compassionate and knowledgeable legal advocates know what it takes to guide you through some of life’s most challenging family transitions.
Our legal professionals are driven, attentive, and dedicated to achieving the best result possible. Every situation is unique and before hiring our firm, our attorneys will provide you with a comprehensive one-on-one consultation to discuss your legal concerns and goals.
Looking to the future? We can help you understand what goes into the estate planning process, evaluate your assets, and prepare all necessary documents, including basic wills, trusts, powers of attorney, and advanced directives.
Facing the probate process? We understand that settling one’s financial matters after a death, with both family members and creditors, can be daunting. The Law Offices of J. Jeltes, Ltd. can help you navigate challenges that may arise during probate administration, from minor and disabled heirs and legatees to dealing with creditors or unfunded trusts. Our attorneys have experience with both contested and uncontested estates, asset division, and probate administration.
Have any more questions? Ready to get in touch? Don’t hesitate to contact us whenever you’d like to begin the conversation.