What is Probate?
Probate is the process of distributing the assets of a deceased individual, also known as an “estate,” through a court supervised process. More often than not there is a specific division of the court, known as the Probate Division or Probate Court, which supervises the administration of an estate. Known for being costly and time-consuming, the Probate process can be avoided entirely with a thorough estate plan. However, there are some instances where it may be beneficial to go subject yourself to the court’s supervision.When do I have to Probate?
If there is no Will
There are many instances where you may be required to go through the Probate Court to distribute a deceased person’s estate. When an individual dies without a Will, they are known as “Intestate.” When a person dies intestate, their estate is required to though court-supervised probate, and will be distrusted under the framework of the Illinois Probate Act.
If there is a Will
If an individual has a valid Will when they pass, they are known as “Testate.” Having a Will is the first step to avoiding the Probate Process. Whether or not you plan to distribute the estate through court, YOU MUST FILE THE WILL WITH THE COURTHOUSE. Filing a Will is free and does not start the probate process with the court.
If the Testator (legalese for “a person who died with a Will”) was the sole owner of Real Estate when they passed, their estate must go through the Probate Court. However, if the Real Estate is held in Joint Tenancy with a right of survivorship, as Tenancy In the Entirety, by a Trust, or a Transfer on Death Instrument, the requirement to enter the formal court probate process can be avoided.
If the Estate has little value
Under Illinois law, if a deceased’s estate is less than $100,000 dollars total, you do not have to enter the formal probate process. Instead, what is known as a “Small Estate Affidavit” can be used to transfer the assets of the estate. However, if the estate contains Real Estate, even if the value is a mere $10,000, a Small Estate Affidavit cannot be used. Additionally, caution should be used with the Small Estate Affidavit. Caution should be used if assets are transferred using a Small Estate Affidavit; the individual using the Small Estate Affidavit is personally liable for any mistakes or damages that can arise.
In some instances, having the court Probate an estate is a strategic move. When a person passes, their creditors have the right to be repaid before any of the estate assets are distributed. However, sometimes creditors cannot be identified. If an estate goes through the formal Probate process, there is a 6-month period where creditors can file claims against the estate. Once the 6-month window is closed, creditors cannot bring claims against the estate, and the estate assets can be distributed.
If you have think someone may challenge the Deceased’s Will, or some other type of potential litigation, it may be wise to go through the Probate Court. This way any questions, challenges, or disputed claims which may arise can be addressed by binding court decisions, rather than worry about threat of possible future litigation.What happens in Probate?
The first step to distribute a deceased person’s assets is to “open” the estate with the probate court. Once the estate is opened, a personal representative of the estate is appointed and receives Letter of Office. The representative is known as an “Administrator” is a person dies intestate, or an “Executor” if a person dies with a Will. The personal representative is given the power to gather the deceased’s assets, and distribute them according to the Will or state law. As always, with great power comes great responsibility, and the representative is liable for any mistakes made administering the estate. The representative may be required to take out a bond, depending on the requirements of the Will.
Once letters of office are issued, the representative may be subject to supervised administration or independent administration of the estate. Supervised administration is a closely scrutinized process which requires filing accounting of the estate with the court on a consistent basis, and meeting hard deadlines. Many actions require court approval before they can be taken. Although a rigorous process, the constant court supervision of supervised administration can lessen the threat of future litigation.
Independent administration is subject to less court scrutiny, and does not demand constant accounting or meeting deadlines. It provides great flexibility for the representative in exchange for increased liability. If the estate is not complicated, or no potential litigation or disgruntled heirs are foreseen, independent administration is the best option.
Once the assets have been gathered and creditors have been paid, the representative distributes the assets. After the final distributions have been made, a final accounting is filed with the court, and the estate is closed, and the probate process is finished.
If you would like more information regarding Probate of the Probate court, contact attorney Michael Rizo to schedule a free