Written By: Amanda M. Zannoni
Wrapping up the lifetime affairs of a loved one who has passed away can be a complicated and confusing process. The most central question to this process, often, is whether or not a probate estate must be opened.
Some estates must be probated. (755 ILCS et. seq.) A probated estate is a court proceeding which will allow you, the administrator or executor of the estate, to access the assets of the deceased person, consolidate them, distribute them, and satisfy creditor claims. The court sets deadlines allowing you to bar creditor claims and issues Letters of Office which make it easy for you to deal with financial institutions, such as mortgage lenders and banks, associated with the deceased person. The whole process typically takes one year. But not all estates have to be probated. So how do you know whether the estate you are handling has to be probated?
Here are some of the essential questions to ask yourself and your family after the passing of a loved one:
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- Is there a Will? Can you find the original?
- What assets are in the estate?
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- Are there assets in a Trust?
- Is the estate valued at more or less than $400,000?
- Is the estate valued at less than $100,000?
- Does the estate contain real property (land, house)?
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- How many creditors are there? Does the amount owed exceed the assets of the estate?
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Estates whose assets are valued at less than $100,000 may be able to avoid the probate process. Illinois permits the use of a document called a “Small Estate Affidavit” to be used for estates whose assets are valued at less than $100,000, so long as those estates do not include real estate. (755 ILCS 5/25-1). Once filled out and executed, this affidavit can be used to transfer assets of the deceased into the name of the person who executed the affidavit. No judge or courtroom is involved, and the person to whom the small estate affidavit is presented must honor it, according to the statute. However, while small estate affidavits can keep you out of court, they come with a variety of pitfalls. Many employees of financial institutions are uneducated about the use of the form and will insist on your presentment of a Court Order (Letters of Office) that can only be obtained through a probate proceeding, even though you might be properly using the small estate affidavit. Some financial institutions require that you use their own specific small estate affidavit forms to access the assets held by the estate, and even more have complicated procedures that require the execution of additional paperwork. Sometimes, brokerage accounts and vehicles must be transferred into your name before it can be transferred to another person (e.g. a beneficiary of the decedent’s Will or a buyer), which can require the payment of additional taxes and fees. Overall, the Small Estate Affidavit, while it can be used to expedite the process of administering the estate, can be quite the headache.
If you have questions about how to handle the final affairs of a loved one, we can help. Call attorney Amanda Zannoni at (630) 510-4931 for a consultation to discuss whether you should probate, or not.
Our online contact form may be found here.
For more information regarding Rathje Woodward’s practice areas and its attorneys, please visit www.rathjelaw.com.