In Illinois, Probate is the process of administering the estate of someone who has passed away. And while some people believe that all estates go through the Probate court system, the reality is that the majority of Illinois estates will never pass through a Probate court. So, when is Probate actually required in Illinois? Let's take a look at the reasons why an Illinois Probate would be necessary.
When Assets are Owned Solely by the Deceased Person
In a general sense, Probate is the court process of retitling the assets held in the name of a deceased person into the name of a living person or entity (while also settling the final estate debts). And in Illinois, when a person dies with real estate in his/her name alone, or when he/she has more than $100,000.00 in personal assets without a proper beneficiary designation, a Probate will be necessary. (If there is less than $100,000.00 in personal assets and no real estate, the estate can typically be handled by using a Small Estate Affidavit in Illinois.)
In order to get around this, many individuals doing estate planning will seek to hold assets in joint tenancy with rights of survivorship, or will place property in some kind of trust. By operation of law, when someone dies with a surviving joint owner on his/her property or with surviving beneficiaries under a valid trust in which property is titled, the property automatically passes to the surviving beneficiaries. Thus, these kinds of mechanisms avoid Probate because there will then be no need to retitle the assets after the deceased person passes away.
Case Study: Probate Needed when Decedent Died with Real Estate in his Name Alone
When Mark’s father passed away, he left a fairly routine estate, including a typical house in the Chicagoland area. Many times, estates like these can be handled out-of-court with an appropriate Small Estate Affidavit. The only problem with Mark’s father’s estate was that he died with the real estate in his name alone. This necessitated the need for Mark to open a probate estate to handle the transfer of his father’s home. Thus, when Mark hired our firm to help him with the probate, we were able to efficiently open the estate, and enable him to smoothly handle the transfer of the real property out of the probate estate. And because of our firm’s extensive experience handling probate matters, we were also able to skillfully assist Mark with several other issues with the estate, including other asset transfers and issues with estate debts.
When Assets are Owned in a Tenancy in Common
Sometimes, individuals will hold assets as tenants in common. This is often the case with real estate holdings. If an individual dies holding a part ownership interest in a piece of real estate as a tenant in common, that interest will need to be administered through the Probate court process.
If an estate owns a part ownership interest in a piece of real estate as a tenant in common with other owners, the representative of the deceased person’s estate will need to find a way to liquidate this interest (or otherwise transfer the interest to the estate beneficiaries) through the Probate court process. Typically, liquidating this kind of interest can be done in two ways: having the other owner(s) on the property buy out the estate’s interest, or by forcing the sale of the real estate through a court proceeding. If the interest is not liquidated, the interest can be deeded to the beneficiaries of the estate; this, however, is not usually done as it creates a complex real estate holding with potentially dozens of owners on a single piece of real estate. One way or another, though, the representative (either the Executor or the Administrator) will have to find a way to properly transfer or liquidate the real estate interest.
If you have questions regarding how a specific piece of real estate is titled in the Chicagoland area, click on one of the county recorder links below to visit various local county recorder sites:
Claims against the Estate
In some estates, there will be creditors or claimants of the estate who have not been properly satisfied by the estate. In order to provide a forum to file a claim against the estate, the creditor or claimant can open a Probate estate in court. After paying the proper fee and setting the case for hearing, the creditor or claimant can petition the court for settlement of his/her outstanding claim against the estate. If there are assets in the estate to pay the claim, and no interested party objects to it, the court will order that the estate be required to settle the claim against it.
Contested Issues related to an Estate
Much like with claims against the estate, an Illinois Probate is sometimes opened for the sole purpose of settling a dispute related to estate property. In order to have the proper forum to settle the dispute, the parties will have to go through the normal Probate court process.
Real Estate Held in Multiple Jurisdictions
Sometimes, an Illinois resident will die holding real estate in his/her name alone in more than one state, and even in another country. A Probate court proceeding will then need to be opened in every state or country in which the deceased person held real estate. These extra Probate proceedings are known as "ancillary Probate estates". Because of the complexity, time, added expense, and stress of needing multiple probate estates to be opened in multiple states or countries, those individuals owning real estate in two or more states, or even in another country, would be well advised to create a living trust to avoid this Probate administration mess.
Case Study: Out-of-State Real Property Complicates Illinois Probate Estate
Bob contacted our firm to assist him when his father passed away in the Chicagoland area. His father’s estate was relatively routine, except for one issue: his father owned real estate in Wisconsin. With real estate in another state of the country, an additional probate proceeding was needed in order to settle the domiciliary estate here in Illinois. Thus, after opening the main probate estate in Illinois, we worked with Bob’s Wisconsin attorney to settle the out-of state real estate. Once the Wisconsin real estate issue was properly resolved, we then proceeded to work out the settlement of the estate here in Illinois. Even though the estate was a little more complicated than Bob originally anticipated, we were able to put his mind at ease by skillfully handling the various real estate issues with the estate.
Contact our Firm
Our firm has helped many Executors and Administrators with routine and complicated Probate estates across the Chicagoland area, including in Kane, Will, DuPage, Kendall, and Cook Counties. If you have questions regarding a Probate estate, complete the form below to set up a free initial consultation today!
The Law Office of Kevin Williams, 2295 Bannister Lane, Aurora, IL 60504, (630) 898-4789