When you think about estate planning, you likely focus on ensuring that the distribution of your estate assets after you are gone occurs according to your wishes. A well thought out estate plan, however, can do much more. For example, have you given any thought to the legal process that your estate will have to go through after your death? This process, known as “probate” can be time-consuming and expensive. The good news is that your estate may be able to avoid probate with careful estate planning.
What Is Probate?
Most people leave behind an estate when they die. That estate consists of all assets owned by the decedent at the time of death, including real and personal property as well as intangible and tangible assets. Ultimately, those assets must be legally transferred to the new owners, either beneficiaries chosen by the decedent or legal heirs pursuant to the state’s intestate succession laws. Before that can happen, however, the estate must go through the legal process referred to as “probate.” During the probate process, several important things occur, including:
- All estate assets are identified, located, and valued
- Last Will and Testament is authenticated
- Any challenges to the Will are litigated
- Beneficiaries and/or heirs are notified
- Creditors are notified
- Creditor claims are reviewed and approved or denied
- Gift and estate taxes are calculated and paid
- Remaining assets are transferred to the new owners
Why Is Probate Avoidance A Common Goal?
Choosing to include probate avoidance strategies and tools in an estate plan is common for two basic reasons. First, the probate process can be a lengthy and time-consuming process for everyone involved. Even a relatively modest estate will typically take longer than six months to probate in the State of Illinois. Creditors in Illinois have six months from the date notice of probate is published to file a claim against the estate. For this reason, the probate of an estate must remain open at least that long before it can be wrapped up. For larger estates, estates where litigation is involved, or even estates where the Executor doesn’t move things along it can easily take a year or more for the estate to make its way through the probate process. The intended beneficiaries of the estate must wait until the end of the probate process to receive their gifts from the estate.
The other reason to avoid probate is the cost. Everyone involved in the probate of an estate is entitled to a fee, including the Executor/Personal Representative, accountants, attorneys, appraisers and real estate agents. Ultimately, those expenses diminish the value of the estate that is passed down to the beneficiaries.
How Can My Estate Avoid Probate?
The overall key to avoiding probate is to leave behind as few probate assets as possible because not all assets are required to go through the probate process. Assets held in a trust, for example, bypass the probate process altogether. Consequently, those assets can be distributed to beneficiaries as soon after your death as you wish using the terms you create when you establish the trust. Likewise, certain types of joint ownership allow your interest in an asset to pass automatically to the co-owner(s) immediately after your death without the need for that asset to go through probate. Accounts designated as “payable on death (POD)” or “transfer on death (TOD)” also allow the assets to be passed directly to the designated beneficiary upon the death of the account holder. Finally, life insurance proceeds are also an excellent probate avoidance tool because those funds can be distributed immediately to the designated beneficiary instead of being held up in probate.
Contact a Probate Avoidance Attorney
Please plan to join us for one of our FREE estate planning seminars. If you have questions or concerns regarding how your estate can avoid probate, contact the experienced probate avoidance lawyers at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.