If you recently lost a family member, you are undoubtedly going through a period of grief as a result of your loss. Along with the emotional impact your loved one’s death will have on you, you may also be faced with handling the legal ramifications of the decedent’s death. If you were appointed by the decedent to be the Executor of his/her Last Will and Testament, or the family is looking to you to take charge in the absence of a Will, it will be up to you to handle the legalities involved in distributing the decedent’s estate. Typically, that entails going through the legal process known as probate. When is probate not necessary though? If the estate qualifies, you may be able to forego the often lengthy and costly probate process.
What Is Probate?
Probate is the name for the legal process typically required after the death of an individual. Probate is intended to serve several purposes, the most well-known of which is the distribution of a decedent’s estate assets. In addition, probate ensures that creditors of the estate are notified and given an opportunity to file claims against the estate. It also provides a forum for challenges to the decedent’s Will and makes sure that any federal gift and estate tax obligation is collected before assets are passed down to the new owners. All of this can take months, even years, to accomplish. Probate can also be expensive, ultimately diminishing the value of the estate passed down to loved ones. The time and expense of probate are why people often include probate avoidance strategies and tools in their estate plan.
Focus on Assets – Probate vs. non-Probate Assets
One of the first steps any Executor or Personal Representative should take is to identify all of the estate assets and categorize them as probate or non-probate assets. As the names imply, probate assets are required to be included in the probate process whereas non-probate assets bypass probate altogether. Common examples of non-probate assets include:
- Assets held in a trust
- Proceeds of a life insurance policy
- Certain types of jointly held property
- Assets held in an account designated as “Payable on Death (POD)” or “Transfer on Death (TOD)”
- Certain retirement or pension accounts
If the estate of your loved one is made up entirely of non-probate assets, the estate is not required to go through probate at all. If, however, some of the assets are considered to be probate assets, you will need to take additional factors into consideration when deciding if probate is necessary in Illinois.
Can You Use a Small Estate Affidavit?
The other common way for an estate to avoid formal probate is for the estate to qualify for an alternative to probate that is aimed at small estates. If the estate qualifies, you can use a Small Estate Affidavit to distribute estate assets without the need to go through probate. To be eligible for the use of the Small Estate Affidavit, the following conditions must be met:
- The value of the “probate assets” must be less than $100,000.00;
- The “probate assets” must not include real estate;
- No letters of office have been issued, nor is a petition for such letters contemplated; and
- There is no dispute with respect to heirship or a Will.
If the estate in question does qualify to use a Small Estate Affidavit it will dramatically reduce both the time and the expense of administering the estate and will allow the estate beneficiaries to receive their gifts much sooner than if the estate was required to go through the formal probate process.
Contact an Illinois Probate Attorney
For additional information, please download our FREE estate planning worksheet. If you have additional questions or concerns the need for an estate to go through probate, contact an experienced Illinois probate attorney at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.